Saudi Arabia, or the Kingdom of Saudi Arabia (KSA) represents the largest market in GCC. The laundry appliance market in KSA, consisting of washing machines, dryers, irons, etc. consists of US$ X.X bn in 2014 and is expected to grow at CAGR X.X% to US$ X.X bn in 2020. The Saudi Arabia market is characterized by a high level of competition between mostly international brands, a rise in revenues as well as volume as global economic stresses ease out. There is a large scale trend of urbanization, urbanization of new markets, and inclusion of women in the workforce with a large young population ready to move out into their own housing quarters thereby driving a real estate business which in turns drives the purchase of appliances. Furthermore, there is a large variation in terms of purchasing power in the country, consequently leading to 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, an expanding middle class, population shift 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.
Distribution, depending on the region, is prevalent through specialist retail chains and large super market 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 are also popular in several regions.
Reputed brands mentioned in the report include Haier, Midea, LG, Samsung, Panasonic, Electrolux, Kelvinator, Whirlpool and Maytag along with other regional manufacturers.
Alternative channels with credit options and aggressive marketing and promotion techniques leveraging discounts, increasing purchasing power, a large tourist population shopping out of urban centres in the middle east, scaling urbanization and standard of living, increasing interest in value added services performed by an appliance making lives easier, focus on research of smart appliances, etc. are driving this market.
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 are some of the challenges being faced in this market.
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