Rising incomes and more flexible payment options are driving an increase in consumer spending on home appliances even as overall sales growth slows, according to market researchers, who found that Cambodians with rising expectations are buying bigger modern appliances for their homes.
In its latest audit of domestic appliance sales for seven countries in Southeast Asia, German-based market research firm GfK found that consumer spending on refrigerators, air conditioning units and washing machines grew by 2 percent during the year ending June 2016, while washing machine sales saw the highest growth in Cambodia, increasing by 20 percent during the period.
Total consumer spending on home appliances in Cambodia increased to $120 million during the period despite lower sales growth, it said.
Meas Chaknita, account manager of GfK Cambodia, attributed the lower growth figure to the large amount of appliances sold during the previous year. He said total spending remained high due to improving living conditions across the Kingdom, making household goods more accessible, even in provinces like Battambang and Siem Reap.
“The Cambodian market continues to modernise itself and an increasing number of households are willing to pay more to upgrade their major domestic appliances to newer models with better features,” he said yesterday.
Chaknita said he expects demand for large appliances to increase by over 10 percent this year, thanks to the adoption of more flexible payment options.
“The expansion of instalment services is helping consumers afford these products,” he said.
“In the past, if someone wanted to buy an appliance, they needed to pay the full price at once in cash, but now they can pay in several instalments over a period of five to six months.”
Hor Hab, vice president of G-Gear, an LG electronics partner in Cambodia, said demand for major domestic appliances has increased sharply in Cambodia because of a growing middle class and the high number of newly built houses being put on the market.
“We have a positive outlook for the future of these products because their costs are getting cheaper and the electricity supply is expanding at the same time as prices are decreasing,” Hor Hab said.
A Samsung appliance vendor at Aeon Mall, who preferred not to be named, said combined sales of refrigerators, air conditioners and washing machines averaged more than 40 units a month.
Prices for the products ranged between $300 and $500 per item, and the majority of the purchases were made through instalment payment plans.
“I think more and more people can afford the products as their incomes rise,” he said. “Purchasing plans using instalment services provided by banks and lending institutions are also contributing to higher sales numbers.”
Regionally, 20 million air conditioners, washing machines and refrigerators were sold at a total value of over $6 billion, according to the Gfk report.
Of those, air conditioners were the most popular product, with sales volume growing by 8 percent, partly due to a spike in demand during the second quarter of the year.
“Southeast Asia was facing unusually hot weather in the second quarter of the year, with some countries seeing historical temperature highs,” said Jasmine Lim, account director for the Home and Lifestyle department at GfK Asia.
“This gave households a compelling reason to acquire air conditioners to cool down their homes.”