MEDIUM RISK for entreprises
What to Watch?
In 2018 the household equipment, being closely intertwined with the business cycle, should continue to face strong demand thanks to the pickup of the global economic growth. The trend not homogenous Developed markets are expected to continue to see only modest sales growth with most of the purchases being made as replacement sales, while emerging markets lead the way thanks to the expansion of the middle class who can now afford a larger variety of household products. We see a number of risks and challenges within the supply chain. The risk and challenges today lie mostly within the supply side of the equation.
The furniture manufacturers’ main focus today is reducing costs at every part of their supply chain to stay competitive at even lower price points. Other industry segments also have to respond to the challenge of digitalization or, in other words, find their niche in the connected home of the future. Since 2000 when LG introduced the world’s first “connected” fridge, the market has been flooded with Internet of Things devices, but even today the technological landscape remains very fragmented with devices from different manufacturers being unable to communicate with one another. Those companies that are able to deliver products that not only fulfill customer’s needs but also anticipate them will gain a competitive advantage.
Domestic appliances: Closer integration with retailers (for example, washing machines ordering detergent when running low)
Consumer electronics: Hisense and TCL, Chinese TV manufacturers, for the first time have earned their place among the world’s top 10 LCD TV brands in terms of sales
Contact Euler Hermes
Economic Research Team
Sector Risk Analyst