Korea’s home appliance sales down 10% in 2022 on slowing demand

2023.03.14 13:33:01 | 2023.03.14 13:35:44

[Photo provided by LG Electronics]이미지 확대

[Photo provided by LG Electronics]

Sales of South Korean appliances in the domestic market dropped 10 percent last year on reduced demand after the pandemic and weak consumer demand due to an economic downturn.

According to market data tracker GfK on Tuesday, last year’s sales of 27 home appliance products in Korea, including televisions, air conditioners and washing machines, fell 10 percent from a year earlier. The figures in the first half declined 5 percent year over year and 16 percent in the second half, which include those of major offline and online channels.

The Korean home appliances market, which showed an unprecedented growth due to Covid-19 in 2020 and 2021, contracted significantly as the government shifted to living with Covid and high prices chilled demand last year. The slowdown was gradual in the first half but the fall became greater in the latter half as benchmark interest rates surged. A huge cut in year-end promotions by retail companies also played a part, according to GfK.

Sales of large appliances such as TVs, air conditioners, washing machines and refrigerators dropped the most at 15 percent. It is attributable to high prices, low replacement demand and early revenge buying during the pandemic. The fall in home sales amid the slowing real estate market was another factor behind the sluggish sales.

Sales on online channels such as open marketplaces and social commerce, which had been steadily growing, were also down 3 percent due to the overall decline in the home appliances market. Yet, the decline is smaller than the 16 percent drop at offline home appliance stores and large supermarkets. The share of online channels in the entire market, as a result, rose 3.4 percentage points from a year ago to 45.9 percent.

“It would be hard to expect a market rebound if high prices persist this year, but opportunities remain for brands as there are product categories that can benefit from high prices such as kitchen appliances and brands can target high-income consumers who are less vulnerable to high prices,” said Shin hye-mi, an analyst at GfK.

By Pulse

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