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Impact Of COVID-19 On The European Home Appliance Industry And Market

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Earlier to the COVID-19 pandemic, a modest growth rate in the electronics market was witnessed in Europe. After the pandemic, electronics industry has faced a dual impact. The production facilities of the electronics parts have been halted owing to the logistics slowdown and unavailability of the workforce across the globe. On the other hand, various e-commerce companies all across the globe have discontinued the delivery of non-essential items (including most of the electronics products), which is affecting the electronics industry, specially home appliance industry.

Several major economies including the Italy, France, Spain, Germany, are affected by the COVID-19 outbreak and so is their electronic industry. Research by the American Chamber of Commerce in Shanghai (AmCham Shanghai) found that two-thirds of home appliance  businesses operating in Europe expect demand to be lower as a result of COVID-19 due to lack of sufficient staff. The shutdown of retail shops and showrooms of major brands, supermarkets, and hypermarkets for a definite period of time is further anticipated to affect the sales of various electronics products.

Apart from this, COVID-19 has also disrupted the global supply chain of major electronic brands. China is the largest producer and exporter of various electronics input supplies that are essentially used to produce finished electronic goods. The ongoing production halt in China has forced the other electronic manufacturers based in Europe to hold the production of the finished goods on a temporary basis, which in turn leading to the gap in the demand and supply of the electronic products.

According to data from market research, about 57 percent of major home appliances are manufactured and distributed in countries domestically (about 317 million units), while 43 percent of the global demand of major home appliance shipments are imported from other countries (about 240 million units).

The primary exporter of major home appliances is China, which contributes 61 percent of the shipments exported to other countries. Compulsory measures limiting factory output in China has severely impacted supply chains, diminishing the 2020 outlook for major home appliances. As the COVID-19 outbreak develops, we expects a decrease of -7.0 percent on exports as a consequence of this temporal reduction of manufacturing activities and shipping capacity. Not only exports but also local production will be impacted as other key manufacturing countries take similar measures.

Furthermore, it is expected the outbreak of COVID-19 will impact household incomes and further shrink the already stagnant housing market, two key variables that drive major home appliances consumption. The mix of all these variables will result in a decrease of -1.8 percent on the global home appliance market but European markets  will face the most adverse consequences of that impact as a result of an already weakened growth rate previous the outbreak.

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