Electrolux 2011 Annual Report Download - page 24

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Electrolux markets
A slowdown in demand in Western Europe and North America,
combined with the rapid emergence of an affluent middle
class in densely populated growth markets, has led to
a gradual transformation of the market for household
appliances. Adapting the business and offering to
this new environment is necessary to continue
growing profitably. In 2011, Electrolux expanded its
presence in growth markets and launched a long line
of products and solutions adapted to global and
regional demands. Furthermore, the Electrolux busi-
ness is being increasingly impacted by such strong global trends as
population growth, an expanding global middle class, higher life
expectancy and rapid urbanization. These developments mean that
there is increasingly limited supply of resources to satisfy the needs
of a growing number of people, and more and more consumers
have higher disposable incomes. Electrolux focuses on solutions
based on lower consumption of these resources and on identifying
new alternatives. Other factors also accentuate the fact that
Electrolux operates in a global industry. There are fewer, larger and
more international manufacturers and retailers, which means that
global brands and products are ever-more important. The five larg-
est manufacturers of major appliances in the world – Whirlpool,
Electrolux, Haier, Bosch-Siemens and LG Electronics – accounted
for approximately 45% of the market in 2010. To maintain competi-
tiveness in relation to rapidly expanding manufacturers from low-
cost areas, it is important to leverage both global and regional econ-
omies of scale.
Growing demand for core appliances
annual report 2011 markets
50 100 150 200 250
2010
2005
Between 2005 and 2010, the global demand for core appliances significantly increased, particularly due to strong growth in Asia. Demand for core appliances
in mature markets has simultaneously decreased. In 2010, the demand in growth markets constituted 60% of the total market volume compared to 50% in
2005. Electrolux strategy is to capture this increased demand in growth markets. To read more about Electrolux strategy, see page 34.
Source: Electrolux estimates.
589 million
343 million
Demand for core appliances,
million units
Over the past decade, Electrolux has made the transformation into an innovative, consumer-focused company. Now
growth is becoming more important. From previously having been heavily exposed to mature markets, the share of sales in
growth markets, such as Africa, the Middle East, Asia and Latin America, is to increase rapidly. The acquisition of
appliances manufacturers CTI in Chile and Olympic Group in Egypt combined with strong organic growth has boosted
the share of Electrolux pro forma sales in growth markets from 25% in 2009 to 35% in 2011.
20