Introduction
Residential kitchen has always been a hub for socializing and bonding in the family. Due to Covid-19, people were bound to stay at home & they tried exploring new dishes & got more connected to Kitchen which helped the industry is expanding tremendously. Residential kitchen market comprises of both Modular kitchen and Kitchen Appliance market. This blog will give you all the insights on Modular Kitchen & Kitchen Appliances market with its key drivers, opportunities and challenges prevailing in the industry.
Residential kitchen industry and its trends are constantly evolving through years due to increasing awareness of consumers about the options available to them in the market point toward a very bullish future for the kitchen industry as a whole. This industry is itself a huge market with various segments starting from Modular kitchen industry to Kitchen utensils and Kitchen Cabinets & Furniture etc.
Modular Kitchen: It encompasses of modern Kitchen furniture, Cabinets and Diversified materials for the accessories used in the kitchen. It can be made of various materials like wood, high pressure laminate, melamine, etc. Global modular kitchen market has reached to $33 billion in which India holds $206 million in the year 2019 and is expected to grow with the CAGR of over 27% by 2024.
Kitchen Appliance: Kitchen appliances are cooking appliances designed for smooth easy cooking. This segment contains various kitchen appliances by its product type: Refrigerator, Cooking Appliance, Dishwasher and others and by Fuel Type: Electric, Cooking Gas and others. Global kitchen appliance market size was valued at $237 billion in 2019 and is expected to grow $377 billion by 2027 with registering 6% CAGR. While in India the market was valued at $290 million and is expected to grow with 15% CAGR in next five years.
Impact of Pandemic on residential kitchen market
Whole world is fighting against pandemic & it has impacted on Health & Economy a lot which led to a loss of almost trillion dollars of revenue globally. The whole economy is going downwards creating challenges and opportunities both. If we talk about its impact following are the positive and negative impact which has affected the global economy majorly.
Future Outlook
Market Overview
Residential kitchen market is driven by the rising middle-class population, decreasing household size, growing demand for customization and changing customer preference. Keeping pace with the changing preferences, the kitchen industry is keep evolving its product portfolio with new innovations and consumer behaviour. The pandemic has put health and wellbeing at the front of our minds and the homes of the future will need to be ready for the next health crisis as well as our emotional needs.
Changing demand incorporating customer preference
Our priorities are changing and thus, the industry has to be ready with changing demand of their customers. Following are the changes that kitchen industries are adapting to cope up the customer expectation:-
- Growing preference of modular kitchen & appliances
- This market is driven by strong growth in residential construction industry, the global residential construction industry market was worth over 4 trillion dollars in 2018 and is expected to grow double in the coming 5 years.
- Online presence
- (Marketing + Distribution channel) of kitchen appliance & its market will increase
- People are shifting to online marketing for the buying interest. The online distribution channels have a platform where the people can buy kitchen accessories and design as per their requirements, needs and budget.
- Growing urbanization leads to product Upgradation
- Rise in dual income households & fast pace modern lifestyle drives this market bit higher taking technology benefits
- Growing popularity of ready to eat foods may hinder the conventional market
- Economically availability of electricity/energy sources and rising concern regarding eco-friendly appliances are expected to be the key drivers
- Regulatory authorities also encourage energy efficient products & demands.
Competitive Advantage
Competitive advantage is a deep proficiency that enables a company to deliver unique value to customers at affordable price. Further talking about residential kitchen market, it is segmented between small/regional, local, national and international players in the competitive market. Key players in the market are aiming to achieve product differentiation and effective value proposition to beat the market. The market is majorly captured by small players holding 70% of the modular kitchen market. While other 30% of the market is captured by the national level brands. While 60% of kitchen appliance market is catered by national brands 30% of kitchen appliance market is catered by its regional players and only 10% of this market is catered by its local brands.
Challenges
The outbreak of Covid-19 has smashed the whole economy & brought effects on many aspects, like banning travels, restriction on roaming outside, restaurant has been closed, massive slowdown on supply chain, stock volatility and falling business growths. All industry has suffered massive losses and had to change their working patterns considering the new norms. In this blog we have identified few challenges that residential kitchen industry is facing due to this Pandemic along with the solution that has to adapt by the industry for the survival in the market. We have identified following challenges which may occur.
Opportunity for Kitchen Industry
Every fall in the economy can be seen as a new opportunity, and this fall was unpredictable in early 2020. However, Residential Kitchen industry becomes the top most industry considering the necessity and with the emergence of this pandemic and stay at home guidelines – the use of kitchen and its utensils increases. Following are the opportunity which can sustain this industry throughout the pandemic:
- Market has to adapt change according to the demand, and industry has to adapt agile concepts and be resilient for the change market is offering
- Be a leader in the market to take competitive advantage – for that understand and study market scenario on how it is unfolding and what customer is demanding and what can be the solution to the problem customer is facing
- Invest in technology which maintain your cost line and offers customer an effective price for the product.
- Government is helping industries in this pandemic – do take benefits of those subsidies and invest those to encourage your R&D & technology departments.
- Follow ethical guidelines given by regulatory authorities to survive in the market
- Most importantly study the market on regular basis to understand the unfolding scenario and adapt/implement the change before the market realize.
Conclusion
The impact of Covid-19 on kitchen industries is unpropitious, making businesses face unique and significant challenges. And one of the finest ways they have come up with to overcome the impact on industries and sectors is using trending technologies. Going by the growth trends in India, with its flourishing middle-class population and higher disposable incomes, is going to see a more matured market for kitchen industry in the years to come.
Author:
Hiral Shah, A Business Analyst, who has qualified Masters in management, and currently working on conceptual creation as product developer and also handling marketing activities at J.hirani. She loves to visualize the thoughts and putting the same into action with creative touch is what makes her stand out from the crowd. She is punctilious and approachable by her nature.
About J.hirani: J.hirani is a Strategic Transformation team which works as a growth partner for different organisations in various industries by providing services like Agile transformation, Scenario mapping, Strategic alignment, Balance scorecard, Digital transformation, Incubating new ventures, Operation excellence and Aligning human capital.
©J.Hirani, Residential Kitchen Industry – A steps to Innovation & Future, December,2020. All rights reserved
