Abstract
Euromonitor International' s Domestic Electrical Appliances in Venezuela market
report offers a comprehensive guide to the size and shape of the market at a
national level. It provides the latest retail sales data, allowing you to
identify the sectors driving growth. It identifies the leading companies, the
leading brands and offers strategic analysis of key factors influencing the
market - be they new product developments, packaging innovations,
economic/lifestyle influences, distribution or pricing issues. Forecasts
illustrate how the market is set to change.
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Large kitchen appliances; Small electrical appliances
Executive summary
Slowing performance seen in the second half of 2008
After years of aggressive growth along with Venezuela' s oil boom, the domestic
electrical appliance (DEA) market began to see slowing growth in the second
half of 2008 as the world recession started to make its appearance in
Venezuela. Oil prices took a significant dip from their high in July of 2008,
and with consumer confidence shaken and interest rates rising in response to
the difficult economy, the boom in domestic electrical appliances began to ebb
towards the end of the year. The result was slowing growth across the board
compared to the excellent results obtained in 2007.
Luxury items still doing well
Despite signs of a slowdown, the market for items that confer status on
Venezuelan consumers continued to perform quite well throughout the year, with
items such as electric wine coolers/chillers and other personal care
appliances seeing the highest growth rates. With an economy heavily dependent
on oil and the government in control of enormous funds, those with government
connections are becoming a large up-and-coming consumer class that demands
prestigious durable goods. This target market has made Venezuela a good
destination for players selling more exclusive products that are not geared
towards the general population, such as Cuisinart.
Government interest in DEA increases
Already a participant in the food retailing sector with large subsidies for
purchases at government-run Mercal stores, the Venezuelan state is increasing
its efforts to enter into the home appliance business. In late 2008 the
government launched Reinita and Famosa brands of refrigeration appliances,
laundry appliances and cookers through subsidized retailers in order to
provide these items at low cost to Venezuela' s poor population. Whilst the
products did not go over well in 2008 and so far have fallen short of the
government' s expectations, there are plans to team up with Chinese
multinational Haier in order to provide exclusive low-priced goods, likely
assembled inside the country in order to encourage local manufacturing.
However, as a result of the nature of Venezuelan consumers and challenges
facing the government, these plans are unlikely to present a serious threat in
the short term.
Difficult distribution distorts the Venezuelan market
With strict currency controls and a limited amount of dollars exchanged at the
preferential rate for DEA importers, logistics continue to impose a
significant burden on all players in the market. As of 2008 preferential
treatment for products produced in Latin American countries was removed and
altogether the cost and time spent bringing new products into the country has
increased across the board. DEA players in Venezuela are finding that getting
their products to market is as much of a challenge as competing in terms of
marketing or product positioning, and the biggest players with experience
dealing with the government are the beneficiaries.
Uncertain future for electrical home appliances
Although oil prices may well rebound and allow consumption in Venezuela to
resume its frantic pace, the many uncertainties of the market, lack of
investment in the country, and the strong role of the government in the
country' s economy leave a great deal of uncertainty about what future
performance will be. However, the most likely scenario is that the market is
headed for continuing growth given the large reserves the economy holds in
order to weather the current storm, combined with the continuing dependence of
the world on oil and the likelihood that current policies will remain
entrenched for the coming years. In addition, the large deficit of available
housing for the population leaves a strong growth opportunity. As a result,
conservative growth rates for the 2008-2013 forecast period are expected, but
growth may be driven more by the new class of well-to-do consumers rather than
the surging lower-middle class that characterized 2004-2008 review period.
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