The move is a change of strategy for the company, which in the last few years, marked by the economic crisis and the decline of consumption, had to adjust to Romanians’ lower budgets.
“We think this year will be at least as good as 2011. We will focus on the premium segment,” says Mioara Bolozan, marketing manager of Whirlpool Romania. She has been filling this position since 2005.
In the past few years, marked by the financial crisis and the consumption decline (almost 20% in the last three years), Romanians have narrowed their acquisitions of enduring goods, such as refrigerators and washing machines. The products were not replaced until the time when they were no longer functional. The first signs of optimism appeared last year.
“The market of large home appliances recorded a slight growth in 2011 against the previous year. There were also signals of a change in Romanians’ consumer behavior,” explains Mioara Bolozan.
She says last year Romanian consumers made significant acquisitions from the very first few months of the year and did not wait for the fourth quarter, traditionally the best for this market.
“This is good news for the market. And consumers were also very careful about what they were buying.” They didn’t just chase promotional offers, but sought to buy products that would prove a good investment in the long run, believes Mioara Bolozan. She says this trend will continue into 2012.
People still buy on credit
However, Bolozan believes consumption of big home appliances is currently tightly connected to the evolution of people’s income, unlike in the years when many purchases were made on credit, and sales in this sector were not directly influenced by the wage trend.
“Romanian consumers have not completely dropped this type of acquisitions, but they are more careful when deciding to take on debt. So, we believe the market will evolve based on the increase in average incomes in Romania.”
Last year the market of large home appliances was worth EUR328 million.
“We believe the market of big home appliances will post moderate growth of 5-7% this year. As many products become obsolete, Romania will become a home appliances replacement market, with customers opting for newer models, with a special design and technical improvements.”
As for Romanian customers, she says most consumers are not first-time buyers. Many are looking to buy better products, that can make their lives easier and lower their electricity bills.
The company rose at the same rate as the market
Whirlpool also relies on the long term income increase. In 2010, the last year for which financial data are available, Whirlpool posted sales of 165 million lei (EUR37.7 million). “2011 sales progressed at a similar rate to the market.” Last year the big home appliances market rose by around four percent.
Sales recorded in the first two months of the year were similar to those recorded in the similar period of 2011. The best sales were recorded by washing machines, built-in stoves and ovens.
Bolozan says the local market still has a potential to grow, but one can no longer talk about the spectacular rate recorded during the boom period. The market has matured and it is less likely to see an abrupt spike in purchases on this market, Bolozan believes. (EUR1=RON4.3718)
(English version by Daniela Stoican)