Growth of small domestic appliances in Poland by 8%
Wpis dostępny jest także w języku: polski
The Covid-19 pandemic has now lasted nearly 1.5 years in Poland and continues to have a huge impact on all sectors of the economy. The collapse of the HoReCa market, accompanied by ubiquitous e-commerce. Against this background, how can we explain the increase in sales of small domestic appliances in Poland? What influence do the exchange rates and the situation on the Asian market have on the pricing policy, says Michał Obalewski – President of Gero Sp. z o.o., the exclusive distributor of the Ariete brand in Poland.
What, in your opinion, was the first quarter for the small household appliances sector?
The beginning of 2021 was very good for our industry. According to APPLiA estimates, Polish consumers spent PLN 13.6 billion on household appliances (i.e. the growth amounted to 14%), and the sales of small household appliances alone increased by 8% year-on-year.
Importers and manufacturers had been prepared for a long time to meet the high demand, which emerged already in spring 2020 and has remained at a high level since then. Despite the logistical turmoil in Asia – companies with solid financial foundations and refined logistical solutions – have mostly coped and have been able to meet the ever-growing needs of customers in Poland.
The pandemic has been going on for over a year now. Has it caused any changes in the company’s sales policy?
The pandemic has obviously affected the way each of us works and many aspects of our daily lives. The inability to eat in restaurants, among other things, has strongly influenced the need to prepare meals on our own. In many cases, the increased demand resulted from the need to complete our homes with appliances that were previously unnecessary, but have become indispensable in the new reality. Even if we previously shunned self-cooking, we now started to be masters in our own kitchens, and culinary experiments and testing new recipes prompted us to increase spending on kitchen equipment. It is kitchen equipment that makes up the biggest part of the small appliances market in Poland and is estimated to cover as much as 65% of its value.
From a business perspective, the most important issue was the lockdown and closure of most retail outlets. At that time, sales of household appliances almost completely moved to the Internet and have remained there to a large extent until now. It can be said that the situation significantly accelerated changes that had been progressing for years (moving sales online) and in many cases forced companies to make additional investments and quickly adapt to new conditions. A significant change was the temporary loss of importance of traditional channels, which translated into an increase in budgets used for online promotion. In contrast, companies presenting their devices online and using e-commerce sales tools also before the pandemic, in principle did not have to adapt specifically to the new situation. What was more important in these cases was logistics and proper planning of stock levels so that product availability and delivery times were in line with consumer expectations and predictions.
What are the main concerns for household appliance manufacturers at the moment?
Currently – the still tense logistics situation in Asia and the rising prices of raw materials, which consequently also increase production costs, seem to be the biggest problem for the industry. It is also worth noting the continuous and dynamic fluctuations on the foreign exchange market, where the weakening of the zloty against the dollar and the euro – may be reflected in the pricing policies of companies and significantly affect the prices of goods for end customers. This makes planning more difficult and requires much more attention from producers and importers than before. Any future trading activities carry considerable risk and may mean having to accept much higher costs of doing business than initially anticipated.
What do you see as the way forward for the industry? What is currently the most effective way of reaching customers?
From a customer perspective, as we spend much more time at home, we have started to look at our living space in a completely different way than before. The design of the appliances will play an increasingly important role. At the same time, as before, the largest corporations in our sector will set product trends, respond to customers’ expectations and create new needs. The brands with which we have the pleasure of cooperating, among others, do it with even greater intensity and creativity, using the most modern technologies. In all this we must not forget about the ever-increasing evolution in consumer behaviour. This means that also the way devices are presented – especially on the Internet – will determine the “to be” or “not to be” of many brands.