Home appliance advertising in India to grow at 18% by 2023: Zenith report
India and Russia see strongest growth with regard to more first-time purchases in the category
Oct 04, 2021 04:51:00 AM | Article | Campaign India Team
Zenith has released a home appliances ad spend forecast report for 2021. According to the report, the home-appliance advertising in 12 key markets will expand by 12.6%, compared to total advertising growth of 11.5%.
The report states that consumers are investing in making their homes more pleasant to live in, since they have been spending most of their time there. This has fueled the demand for both large and small appliances, especially cookers, washing machines, dishwashers and air conditioning units.
The report predicts that consumers will continue to devote more time and budgets to their homes, leading to a 6% annual growth in home appliance ad spend in 2022 and 2023.
It adds that the advertising expenditure by home-appliance brands will rise from US$4.4 billion in 2020 to US$5.0 billion in 2021, as compared to the US$4.5 billion that was spent in 2019, before the pandemic. It suggests that the number will reach US$5.6 billion by 2023.
The forecast also observed that digital advertising accounted for 55% of home-appliance ad spend in 2020, as compared to 51% in 2019.
The report adds that since most home-appliance purchases are made out of urgent necessity, brand advertising is essential for creating differentiation and placing the brand at the top of mind when the consumer wishes to buy a product. Paid search is then used for conversion, at this time of consumer urgency.
Digital advertising will become even more important to home-appliance brands over the
next few years, while brands continue to invest in ecommerce over the next few years, driving 10% annual average growth in their digital adspend between 2020 and 2023. Digital advertising will rise from 55% to 57% of their ad budgets over this time, the study states.
Television is still a vital channel for home-appliance brand-building, supplemented by OOH. In 2020, home appliance brands spent 29% of their budgets on television advertising, compared to an average of 24%, and 7% on OOH, compared to 4%.
Zenith forecasts home appliances brands’ ad spends on OOH to grow by 8% a year between 2020 and 2023. It also suggests that TV will lag behind, with growth averaging 6% a year.
Drew Erskine, global strategy lead, Zenith, said, “Faced with rising interest in purchase, the increased role of digital in the mid-to-lower funnel, and a greater focus on delivering direct-to-consumer experiences, appliance brands have never operated in a more demanding and complex marketplace. Successfully building brands for the long term will require agile strategies that find the balance between cultivating desire through broad communications and converting interest, often digitally, in more relevant ways.”
India and Russia have seen the strongest growth with regard to more first-time purchases in this category.
Zenith forecasts that the home-appliance advertising in these countries will grow at average rates of 18% and 16% respectively a year between 2020 and 2023.
This growth should remain strong after a swift recovery in 2021, as rising personal incomes allow households to buy new types of appliances for the first time.
Jai Lala, CEO, Zenith India, said, “Over the past few years and especially during pandemic,
home appliances in India have witnessed substantial growth. Consumer sentiments
are changing towards the category - from being a luxury item to now as a need based one.
Increase in spends will be towards digital followed by TV and Print amongst other
Australia, Spain, the UK and the US also suffered from big drops in home appliance ad spend
in 2020, and are consequently expected to enjoy healthy recoveries as brands recommit to
the market. Zenith forecasts annual growth of 9% to 14% a year in these markets between
2020 and 2023.
On the other hand, Germany, Switzerland and Italy are expected to have the slowest growth, with 0% to 4% annual growth in home appliance ad spend between 2020 and 2023.
Jonathan Barnard, head of forecasting, Zenith, added, "In most markets, the increased appetite for home improvement is incentivising home- appliance brands to step up their communications activities substantially. Most of this growth is going to digital channels to support increased ecommerce activity, but traditional media like television and out-of-home will remain essential tools for maintaining mass brand awareness."