Summary

The UAE domestic market is mainly characterized with several countries with the increasing urbanization and participation in the workforce, with a large young population ready to move out into their own housing quarters, driving a real estate business which in turns drives the purchase of appliances. Additionally, there is a large variation in terms of purchasing power in these countries, and consequently, a low level of brand consolidation by all brands except early starters like LG, etc. Moreover, it is particularly important for companies to innovate for low cost/no-frills alternatives to their existing offerings. This is because of changing economic conditions in the region, access to new markets, urbanization of a number of regions, higher purchasing power as a result of increasing employment opportunities and inclusion of women at the world, an expanding middle class, a shift of the population from the rural to urban areas. Trends include innovating for increase efficiency and energy efficiency, as well as water consumption, due to environmental guidelines highlighted by several governments. Smart appliances trend is pervasive through usage of sensors, and other components used in smart technology. Furthermore, innovation in terms of sizes of products more suited to the smaller sized houses being built globally, while maintaining other value-added features is underway.

Drivers

Key Highlights
Alternative channels with credit options and aggressive marketing and promotion techniques leveraging discounts
Rising purchasing power
A large tourist population shopping out of urban centers in the middle east
Scaling urbanization and standard of living
Increasing interest in value added services performed by an appliance making lives easier
Growing focus on the research of various smart appliances


Restraints

Key Highlights
High level of competition across all product classes and in new and saturated markets alike
Insufficient innovations in the mass market product range
High level of income inequality leading to challenges in consolidation and acquisition of market


Key Market Trends

Washing machines are the leading segment within laundry appliances

The growth in this segment of the market is majorly driven by the technological advancement which had picked up rapidly since 2017. Many players have significantly focused on the affordability due to the long-term benefits of more advanced, energy-efficient machines. Energy-efficiency, compact designs, self-cleaning functions and smarter usage capabilities are all the latest trends that have paved the road for premiumization to get back on track in the laundry appliances market in UAE. This will further drive a positive value CAGR at constant 2017 prices in laundry appliances in the forecast period. Majorly MNCs are leading in the market with players such as LG Electronics Gulf and Samsung Electronics Middle East & Africa. As they continued to bet on premium products, both witnessed increases in their shares in 2017.

Ecommerce sales grow as an emerging distribution channel for the purchases

UAE online retail market is emerging fast and is drawing huge attention of investors across the globe. UAE poses the highest internet penetration rates in the world at present along with two other countries Bahrain and Qatar. In the recent times, consumers are mostly researching online before making a purchase, and with a larger number of young smartphone users joining the customer base, it is just a matter of time before pre-purchase online research gets converted into actual online transaction. Within the entire GCC region, UAE has the highest percentage of internet users who actually transact online (46%), followed by Kuwait (35%) and the KSA (25%). Awok.com is a leading UAE-based online retailer which had witnessed a 500% Y-o-Y increase in its revenues in April 2015. While there was some low base effect (as this was only the second year of its operations), a revenue growth rate of 500% clearly shows that online retailing is catching up in the GCC region.

Competitive Landscape

The UAE laundry appliances market is characterized by near consolidated players with many foreign players established since long time and giving tougher competition to the newer players. Players such as Haier, Aftron and Hisense are betting on more affordable options in the UAE market. However, with the stronger trends towards smart devices and energy-efficiency, many consumers are more inclined to buy the products offered by bigger brand names, such as Samsung and LG. Distribution of the laundry appliances based on the region, is prevalent through large retail chains which offer heavy discounts due to manufacturer tie-ups, as well as economies of scale, or through ecommerce, which in several regions offer competitively discounted prices, as well as attractive credit schemes. Private label goods, through innovative card schemes have gained popularity in several regions.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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