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Homewares: Trends and Opportunities Around the World in 2015 and Beyond

The homewares market saw a flat performance over the last five years, as the strong Asian growth was not enough to push sales at a global level. The financial crisis took its toll in Europe (both Western and Eastern countries) and in North America. Largely accessible, both in terms of price points and distribution, homewares is a category of necessity where developments are mainly influenced by social change.

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Homewares: Trends and Opportunities Around the World in 2015 and Beyond

  1. 1. M. CRUZ DEL BARRIO HEAD OF HOME AND GARDEN RESEARCH 7 March 2015 HOMEWARES: TRENDS AND OPPORTUNITIES AROUND THE WORLD 2015 AND BEYOND
  2. 2. © Euromonitor International 2 Our Services  Syndicated Market Research  Custom Research and Consulting Expansive Network  On the ground researchers in 80 countries  Cross-comparable data across every market Our Expertise  Consumer Trends & Lifestyles  Product Categories & Distribution channels  Economics & Forecasting Who Is Euromonitor International? INTRODUCTION
  3. 3. © Euromonitor International 3 Euromonitor International’s Network and Coverage INTRODUCTION
  4. 4. © Euromonitor International 4 Euromonitor International’s Research Methodology INTRODUCTION
  5. 5. HOMEWARES: MARKET OVERVIEW CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER FUTURE CHALLENGES AND OPPORTUNITIES KEY TAKEAWAYS
  6. 6. US$84bn GLOBAL RETAIL SALES OF HOMEWARES (2014) 13% GLOBAL GROWTH (ANNUAL AVERAGE 2008-2013) 0.1% OF TOTAL SALES COME FROM THE US (2014)
  7. 7. © Euromonitor International 7 Homewares US$84 bn Dining US$37 bn Dinnerware US$17bn Beverageware US$13 bn Cutlery US$7 bn Kitchen US$47 bn Cookware US$26 bn Kitchenware US$21 bn The Building Blocks of the Global Homewares Industry HOMEWARES: MARKET OVERVIEW
  8. 8. © Euromonitor International 8 Homewares value sales by region (2014) Western Europe 32% Australasia 1% Middle East and Africa 4% Asia Pacific 30% Eastern Europe 8% North America 16% Latin America 8% China Leads Growth in Emerging Economies… HOMEWARES: MARKET OVERVIEW
  9. 9. © Euromonitor International 9 Homewares value sales by region (2014) Developed markets 48% Middle East and Africa 4% Asia Pacific 30% Eastern Europe 8% Latin America 8% … but Developed Countries Remain Key Players HOMEWARES: MARKET OVERVIEW
  10. 10. © Euromonitor International 10 How does Homewares Compare with other Industries? HOMEWARES: MARKET OVERVIEW 70 75 80 85 90 Global Retail Sales by Industry, US$ billion, 2014 US$Billion Coffee Laundry Care Ice Cream Vitamins and Dietary Supplements Traditional Toys and Games Homewares
  11. 11. © Euromonitor International 11 Homes = Homewares: Rising Ownership Drives Sales HOMEWARES: MARKET OVERVIEW 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 China Turkey Brazil Russia S. Korea US Net New Housing Completion (Selected Markets, 2008-2013)
  12. 12. © Euromonitor International 12 -30 -25 -20 -15 -10 -5 0 5 10 15 20 Spain Mexico US France Brazil Turkey S. Korea Russia China New Housing Completions Growth: Top and Bottom Countries, 2012-2014 % CAGR 2012-2014 % CAGR Homes = Homewares: My Home is My Castle HOMEWARES: MARKET OVERVIEW Housing construction growing fastest Housing construction yet to recover to pre-recession levels
  13. 13. © Euromonitor International 13 Cooking is More than a Necessity HOMEWARES: MARKET OVERVIEW -2 -1 0 1 2 3 -2 -1 0 1 2 3 Stove Top Cookware Food Storage Kitchen Utensils Ovenware Beverageware Cutlery Dinnerware %AnnualGrowth US$Billion Homewares Growth by Category (2008-2013) 2008-13 absolute 2008-13 CAGR %
  14. 14. © Euromonitor International 14 -3 -2 -1 0 1 2 3 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 %ValueGrowth Homewares retail sales growth by category (World, 2013) Beverageware Cutlery Dinnerware Cookware Kitchenware Growing Cooking Interest Boosts Sales Growth Drivers HOMEWARES: MARKET OVERVIEW
  15. 15. © Euromonitor International 15 15 20 25 2008 2009 2010 2011 2012 2013 US$perhousehold World: Dining and Kitchen Expenditure per Household, US$, 2008-2013 Dining Kitchen Cooking Related Products Prove to Be More Resilient HOMEWARES: MARKET OVERVIEW US$105 US$94 US$90
  16. 16. © Euromonitor International 16 0% 25% 50% 75% 100% Brazil Russia India Germany China France Japan UK US Never prepare Less than 5 minutes 5-15 minutes 15-30 minutes 30+ minutes How much time do you spend preparing lunch? Euromonitor Survey on Eating Habits Around the World in 2013 (I) HOMEWARES: MARKET OVERVIEW %ofrespondents
  17. 17. © Euromonitor International 17 0% 25% 50% 75% 100% China Japan India US UK Russia Brazil France Germany Never prepare Less than 5 minutes 5-15 minutes 15-30 minutes 30+ minutes How much time do you spend preparing dinner? Euromonitor Survey on Eating Habits Around the World in 2013 (II) HOMEWARES: MARKET OVERVIEW %ofrespondents
  18. 18. © Euromonitor International 18 Stove Top Cookware vs Ovenware: Tale of Two Products HOMEWARES: MARKET OVERVIEW -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 Asia Pacific Latin America Australasia North America Middle East and Africa Eastern Europe Western Europe US$ billion Stove Top cookware Vs. Ovenware absolute growth (2008-2013) Stove Top Cookware Ovenware
  19. 19. © Euromonitor International 19 Roasting and Baking are Regional Preferences HOMEWARES: MARKET OVERVIEW 93% of households have a microwave 0 20 40 60 80 100 China Japan Mexico Chile US Brazil Russia UK Ovens: Household penetration (2014) 0.1% of households have an oven %ofhouseholds 100%
  20. 20. © Euromonitor International 20 China Shows No Interest in Microwaves HOMEWARES: MARKET OVERVIEW 93% of households have a microwave 0 20 40 60 80 100 China Mexico Russia Brazil Japan Chile UK US Microwaves: Household penetration (2014) Negligible household penetration 91% %ofhouseholds 93%
  21. 21. HOMEWARES: MARKET OVERVIEW CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER FUTURE CHALLENGES AND OPPORTUNITIES KEY TAKEAWAYS
  22. 22. © Euromonitor International 22 Groupe SEB: A History of Success CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER • Net Sales in Small Appliances (2013) US$ 5.4 billion • Net Sales in Homewares (2013) US$ 2.8 billion • Sales growth between 2008-2013 +6.5% CAGR
  23. 23. © Euromonitor International 23 1,800 1,900 2,000 2,100 2,200 2,300 2,400 2009 2010 2011 2012 2013 US$million Groupe SEB Cookware Sales 2009-2013, US$ million, Retail Value RSP Groupe SEB a leading player in cookware CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER
  24. 24. © Euromonitor International 24 Acquisition of leading local brands Control of retail network Introduce other SEB brands to market • Supor • Imusa • Maharaja Whiteline • Company operated stores • Third party retailers • Imusa and Home & Cook outlets Groupe SEB global strategy CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER
  25. 25. © Euromonitor International 25 0 50 100 150 200 250 300 2009 2010 2011 2012 2013 2014 Consumer Appliances: Imusa brand volume sales 2009-2014 (‘000 units) Volumesales(‘000units) Company operated stores in Colombia (2014) 22 Largest cookware company in the US by value sales (2014) 3rd SEB’s Acquisitions to Bolster Retailing Presence (I): The Americas CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER Groupe SEB takeover
  26. 26. © Euromonitor International 26 Company operated stores in China +1,000 Cookware brand in China by sales, 2014 1st SEB’s Acquisitions to Bolster Retailing Presence (II): China CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER 0 100 200 300 400 500 600 2009 2010 2011 2012 2013 2014 Kitchen: Supor Brand Sales in China (US$ mn) 2009-2014 Valuesales(US$million)
  27. 27. © Euromonitor International 27 Currency Fluctuations Hit SEB CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER -20 -15 -10 -5 0 5 10 Japan Russia Turkey %y-o-yvaluegrowth Sales Growth Performance: Local Currency and Euro Y-o-Y Exchange Rates 2012-2013 Local Currency Euro Y-o-Y Exchange Rates
  28. 28. HOMEWARES: MARKET OVERVIEW CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER FUTURE CHALLENGES AND OPPORTUNITIES KEY TAKEAWAYS
  29. 29. © Euromonitor International 29 Commoditization of homewares Competition from private label Unclear brand segmentation The Future Comes with Many Challenges FUTURE CHALLENGES AND OPPORTUNITIES
  30. 30. © Euromonitor International 30 Strong growth forecast Buoyant housing market Strong social mobility Young population Strong growth in multiple retailers Contrasting Factors Shaping the Future of the Regions Weak growth forecast Struggling property market Uncertain economic situation Ageing population Distribution networks saturated but good growth in online sales• Asia Pacific • Latin America • Middle East and Africa • North America • Australasia • Western Europe FUTURE CHALLENGES AND OPPORTUNITIES
  31. 31. © Euromonitor International 31 Fastest Growing Markets -2 0 2 4 6 0 50 100 150 Western Europe Australasia North America Eastern Europe Latin America Asia Pacific Middle East and Africa 2013-18CAGR% US$perhousehold(2013) Homewares: Inverse correlation between spend per household and forecast growth 2013 US$ per household spend 2013-18 CAGR% China Indonesia Brazil UAE Thailand Growth will Come from Emerging Economies FUTURE CHALLENGES AND OPPORTUNITIES
  32. 32. © Euromonitor International 32 0 2 4 6 8 10 12 0 10 20 30 40 50 60 70 Brazil US Russia Germany South Korea Argentina %share US$mn Highest growth countries in Ovenware and Share of Silicone in 2013 2009-13 absolute growth Ovenware 2013 silicone share in Ovenware % Growth Through Innovation: Silicone in Ovenware FUTURE CHALLENGES AND OPPORTUNITIES
  33. 33. © Euromonitor International 33 0 5 10 15 20 25 0 100 200 300 400 500 China Germany Russia US Canada South Korea %share US$mn Highest growth countries in Kitchen Utensils and Share of Silicone in 2013 2009-13 absolute growth Kitchen Utensils 2013 silicone share in Kitchen Utensils % Growth Through Innovation: Silicone in Kitchen Utensils FUTURE CHALLENGES AND OPPORTUNITIES
  34. 34. © Euromonitor International 34 ■ Hygienic ■ Light ■ Easy to clean and store ■ Safer for baby food ■ Cheaper than glass and ceramics ■ Limited cooking usage (mainly baking) ■ Greater loyalty to metal and wood in both developed and developing countries The Pros and Cons for Silicone FUTURE CHALLENGES AND OPPORTUNITIES
  35. 35. © Euromonitor International 35 Smart Objects and the Internet of Things FUTURE CHALLENGES AND OPPORTUNITIES US (2014) SKE Lab Neo Smart Jar 112% Tablet Penetration 162% Smartphone Penetration SEB Groupe: 40% of R&D allocated to Smart Objects and Connectivity in 2014 Source: www.Indiegogo.com
  36. 36. HOMEWARES: MARKET OVERVIEW CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER FUTURE CHALLENGES AND OPPORTUNITIES KEY TAKEAWAYS
  37. 37. © Euromonitor International 37 Key Takeaways Emerging Markets • Growth potential • Lower expenditure per household Developed Market • Stagnant growth • Higher expenditure per household Creating Value • New Product Development • Materials and formats Smart Home • Homewares as part of the “Internet of Things” FUTURE CHALLENGES AND OPPORTUNITIES
  38. 38. © Euromonitor International 38 THANK YOU FOR LISTENING M. Cruz del Barrio Head of Home and Garden Research cruz.delbarrio@euromonitor.com Euromonitor International 60-61 Britton Street London EC1M 5UX www.euromonitor.com Note: 2013 figures are based on part-year estimates. 2014 data is preliminary. Both are subject to change. Final data to be published May 2015

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