Africa Home Appliance Market Share And Size

The South African economy market size is expected to grow at 8.6% in the forecast period. Revenue generation in the household segment in South Africa amounts to USD 201 Million in 2019. The average revenue per user in 2019 was around USD 34.51. Over the past few years, business leaders and investors are becoming more aware of the vast potential in Africa’s consumer market. The continent which is now a home of more than USD 1.1 Billion expected to account for one-fifth of the world’s population by 2025. More and more Africans are entering in consumer class, with millions are emerging from poverty in recent years.

Freestanding refrigerators are gaining popularity in households in the South African market. The factors that are responsible can be attributed to the customer preference for durable, fast cooling, and spacious freezers, and these are backed by the warranty. Freestanding refrigerators remain the leading format found in numerous households followed by freestanding freezers and lastly freestanding fridges.

Smart home appliances are becoming more popular with consumers in South Africa. Players are also focusing on innovation in terms of the energy efficiency of appliances to meet the rising demands of people in the country. Consumers are more aware now about energy consumption and are getting educated about energy ratings by various players in the market. Various market players are promoting their brands in combination with mass retailers.

Competitive landscape

The South African home appliance market remains competitive with both local and international players are aggressively trying to gain a competitive edge in the market. Defy Appliances (Pty) Ltd continues to dominate in major appliances followed by Whirlpool SA Ltd and Hisense. Increased attempts have been made by several players to emphasize the energy efficiency of their home appliances. Cross-industry promotions have been adopted by market players to increase their market share in non-price competition. Marketing and advertising strategies are the other marketing strategies to align themselves with current international trends and developments to influence consumer choices.

Store-based retailing continues to dominate with the bulk of appliances being sold through appliances and electronics specialist retailers and mass merchandisers but retailers mainly specialized in electronics, appliances, and drugstores continue to optimize their available opportunities; private labels continue to pose a challenge in the entry-level market for small appliances. Players are improving their e-commerce presence because of their rapid growth in the sales of consumer home appliances through internet retailing.  In-store retailing, sales staff can explain their product features to their consumers before making final purchasing decisions. The extensive penetration of private label products is most likely to be appreciated by value-conscious consumers.

Market Potential

Based on end-user requirements, the supermarket and hypermarket segment is expected to register a strong market share due to the rising demands for technologically advanced and energy-efficient types of equipment and therefore ultimately reducing the carbon footprint. The upcoming construction projects and government initiatives to increase tourism in the country will likely promote the growth of home appliances especially the commercial refrigeration market. The most successful entrants into Africa are those who have been careful and selective about the markets they enter. Instead of seeking to build a presence across entire countries, they have targeted the fastest growing cities, city clusters, or urban centers where per capita income and spending is far exceeding the national average.

The working-age population of Africa is growing at 2.7% each year. By 2025, nearly two-thirds of the African population of the estimated 300 million Africans African households will have discretionary income. In ten years, the continent’s GDP growth is expected to rise from 4.9 percent to 6.2 percent in the next decade far outpacing the global GDP growth rate of 3.7 percent. Driving this rapid growth are two trends that will continue to have a tremendous effect on the market i.e. urbanization and the rise of mobile communications. By 2025, almost half of the Africans will be living in cities.