One of the fastest growing segments of the consumer durable industry is the refrigerator market with its prerequisite felt for over 365 days in a year. It can be considered to have the highest aspirational value of all consumer durables, with the exception of televisions. Therefore, it can be categorized as an industry of paramount importance with its product being valuable to every household. The penetration of refrigerators is considerably higher in urban areas, although the demand in the rural areas is also catching a speed requiring further domestic penetration.
Ken Research, a market research firm says, the refrigerator market is estimated to grow rapidly in the next few years complemented with the efforts of varied industry players to offer affordable and eco-friendly variants and strategies to penetrate into smaller towns. Additionally, due to the hot and humid weather conditions in many countries, the necessity of the product has increased manifolds. Further, rising per capita income, increasing role of the government in forming rules and regulations and easy availability of financing are also expected to drive the industry.
Research report titled “Global Refrigerator Industry Situation and Prospects Research report 2017” says, the Global refrigerator market is segmented on the basis of product type in order to create a clear picture of the demand pattern across countries; on the basis of end-user, it can be segmented into commercial and residential users; based on the channels of distribution including retail stores, direct sales and online; based on color preference and further, regional and urban/rural segmentation is also provided.
Apart from these, there are certain environmental regulations as well concerning the CFCs and HCFCs. CFCs are the major depleters of the ozone layer in the stratosphere, causing increased skin cancer and global warming and since refrigerators depended on them as coolants and as blowing agents, the stipulations of the Montreal Protocol, which initially required a CFC ban were a massive threat to the refrigerator industry. Moreover, from an environmental as well as from a competitive point of view, HCFCS are even riskier substitute. Although HCFCs were economical, provided sufficient energy efficiency and posed no safety risk, it contributed to global warming and posed a risk to the ozone layer. For this reason, the Montreal Protocol required their phaseout by the year 2020 including the conversion to a new technology in the foreseeable future.
SWOT ANALYSIS AND COMPETITIVE LANDSCAPE
SWOT analysis provides many important figures about the growth of the global refrigerator industry. Following the analysis, the strengths include the generation of employment in the rural & urban areas, FDI Support by government, and existence of the product provide flexibility in adapting to brand- access to markets. Weaknesses include downsizing margins; need to regularly update the technology, seasonal demand as well as price variations & margins. Opportunity includes growing middle class & micro families, potential demanding electrical & appliances markets, India’s market stretch & resources, emerging e-commerce market and increase in nuclear family. Threats might include heavy tax levied on consumers, govt. changing policies and rules, increasing competition & copyrights, increase in raw material cost, availability of power, fluctuations in exchange rates and technologies & adherence to International Compliance Laws (ISO) etc.
The segmentation by region portrays United States as representing the largest market worldwide alongside being a significant exporter of refrigerators and freezers all over the world. Japan can be considered as the second most important key region in the global refrigerator market, wherein the household end-user segment is expected to drive the market growth with further anticipation to expand at a steady pace through 2024. The third position is acquired by Germany, followed by China, Italy, South Korea, Brazil and the United Kingdom. The global key players identified as playing significant role in the growth and development of the refrigerator industry include Haier, Siemens, Midea, Panasonic, SAMSUNG, BOSCH, Hisense, LG, TCL, and Changhong. To strengthen their foothold in the market, they’ve adopted product launch to be the key strategy in attracting larger number of customers.
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