A growing economy in Norway

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Growth for the white good sector, stability for brown goods: the thriving economy and the climatic conditions of the North Europe Country make it a very interesting reality for the household appliance industry.

economic-growth

 

Norway, positioned at the extreme North of Europe, is one of the wealthiest Countries in the Continent and in the world. Its per capita income, expressed in US dollars, the currently accepted measuring unit, slightly exceeded 68,000 yearly dollars in 2015. It ranks second in Europe, after the very rich Luxembourg that reaches 88,000 dollars. Therefore, the small Scandinavian nation precedes the well-off Switzerland that does not surpass 59,000 and USA, with 56,000. In Europe, the other wealthy nations have lower incomes: The Netherlands score 49,000, Sweden 48,000 and Germany 47,000. To make a comparison, the Italian per capita income is estimated in around 37,000 annual dollars.

Origin of this wellbeing is oil, of which Norway is an important producer. However, unlike what happens in the other oil-producing Countries, whose richness belongs to few individuals, in Norway a wise governmental policy has assured a fair income distribution for decades, to the extent that poverty actually does not exist. A “culture of social equity and saving”, according to the statements of a Norwegian minister, today grants a satisfactory lifestyle to each citizen, thanks to a State fund amounting to over 800 billion Euros. With it, they grant at least a middle income to each citizen.

Sales and diffusion of big appliances in Norway

Product 2014 sales (1,000 units) 2015 sales (1,000 units) 2015/14 % variation Diffusion %
Refrigerators 105   97 – 7.6 68
Freezers 138 149   8.0 93
Combi fridge-freezers

 

102   95 – 6.9 55
Washing machines 216 235   8.8 91
Dryers   77   87 13.0 47
Dishwashers 185 199   7.6 80
Traditional cookers   76   76  = 55
Hobs 147 164 11.6 80
Built-in cookers and hobs 213 250 17.4 45
Microwave ovens 144 154   6.9 90
Total 1,403 1,506  7.3

Sources: Elektronikkbransjen, SB (Statistisk Sentralbyra)

Norway refused twice, through popular referendum, joining EEC first and EU afterwards. Nevertheless, an agreement with the latter allows the free exchange of goods coming from Community Countries.

According to the latest official data by the Governmental Statistics Body SB (Statistisk Sentralbyra), today the Country counts 5.25 million inhabitants, spread on a surface of 324,000 square kilometres, i.e. 1.1 times the Italian one. This results in one of the lowest average densities in the world.

Almost one fifth of the population is concentrated in the capital city Oslo while the majority of the remaining inhabitants resides in the Southern area of the nation, less cold than the Northern one.

Dwellings are 2.35 millions, including also holiday houses, estimated in around 400,000.

 

Sales of small appliances in Norway

2014 sales (1,000 units)

 

2015 sales (1,000 units) 2015/14 % variation
Shavers    134    131  -2.2
Epilators      51      59 15.7
Others for body care    664    643  -3.2
Electrical coffeepots    400    356 – 11.0
Cooking appliances 1,502 1,567     4.3
Others 1,087    962 -11.5
Total 3,838 3,718 – 3.1

Source: Elektronikkbransjen

Market and diffusion

The yearly sales, both of white and brown goods, are surveyed with great accuracy by the sector review Elektronikkbransjen, magazine of the homonymous trade association. The criteria of product repartition slightly differ from those used by other European sources.

In 2015, the global spending amounted to about 10.7 billion Norway Crowns for white goods, 7.5 billions for consumer electronics meant in the conventional sense, i.e. not including tablet and smartphone. At the average annual exchange rate, these values correspond respectively to 1.2 and 8.2 billion Euros. This means an annual per capita expenditure of 228 Euros for white goods and of 156 Euros for brown goods.

They are very high values, if we consider that in the wealthy Germany and Netherlands nations the average figures are around 100 euro and in France they reach a per capita expenditure of 115 Euros in white goods.

The Norwegian market is a typical rich market, with high presence levels for appliances like the freezer or the dishwasher. The diffusion of the first is significant and shows consumers’ massive trend towards the use of frozen foods, indispensable in a cold climate where fresh foods are almost completely missing. All that with the addition of a strong availability of fish, since the Norwegian fleet is one of the most important in Europe.

The remarkable presence of hobs reveals then consumers’ tendency of preferring the combination between the latter and the microwave oven instead of the conventional cooker, which in its turn is affected by the competition of built-in models.

Generally, big white goods are growing, even if today the market is quite saturated. This situation occurs then for hairdryers, electrical coffeepots and vacuum cleaners, with consequent slight downturn for small appliances in their whole.

The crisis of brown goods, perceived in all Countries, spares neither Norway. Only video camcorders and audio video systems score a growth, while the other appliances show more or less accentuated downturns. The competition of new products, from tablets to smartphones and still others, is felt in the extreme North of Europe, too.

The Norwegian market is almost completely satisfied by the import. Some local companies, like Wilfa and Adax, produce just coffeepots the first, heaters the second.

Sale and diffusion of some consumer electronics products in norway

2014 sales (1,000 units)

 

2015 sales (1,000 units)

 

2015/14 % variation Diffusion

%

TV sets 429 387 – 9.8  95
DVD players   65   40 -39.5  45
Blue-ray players 110 110  =  75
Video camcorders 106 114  7.5  40
Digital camcorder 174 156 -10.3  37
Audio video systems 163 183  12.3  70
Total 1,047 980 – 6.4 —-

Sources: Elektronikkbransjen, SB

Prospects

The notable prosperity on one hand, the cold climate on the other hand induce consumers to provide their homes with all possible comforts. Besides, in the winter period the hours of daily light do not exceed 6, with as many as 18 hours of darkness. This contributes in making Norwegians stay at home as long as possible, thus rising the demand for consumer electronics.

For the incoming years, official forecasts indicate a neat growth of white goods: by 6% for big appliances, by 3% for small ones. The general trend is towards more sophisticated models, of higher quality.

Only stability is expected for brown goods, because the new products of the information sector hinder the expansion of the traditional consumer electronics.