The demand for Y-shaped Asian axes is increasing as the industry faces a new generation of manufacturers. The growth of the segment is driven by rising incomes in the region, which in turn requires high-quality axes that can compete with domestic and imported products. Owing to the vast size of the Y-shaped market, it is almost impossible to estimate its size. However, from a historical perspective, it is clear that this sector has grown at an average annual pace of 6% from 1997 to 2007. Since then, however, the rate of growth has substantially slowed down to 2% per annum over the last few years. This article attempts to provide key insights into the YZ Asian market trends and outlines what these trends mean for companies operating within this sector.
YZ Asian Market Size and Trends – By Country, 2018
The YZ Asian market grew at an average annual rate of 10.5% from 1997 to 2007, then declined to 6.2% over the last few years. The demand for Y-shaped Asian axes is increasing as the industry faces a new generation of manufacturers. The growth of the segment is driven by rising incomes in the region, which in turn requires high-quality axes that can compete with domestic and imported products. Forecasts suggest that the market will grow at a moderate rate of 6.1% over the next few years, with the fastest rate of growth being in the edible goods and household-products categories.
YZ Asian Market Size and Trends – By Product Category
The largest single segment within the YZ Asian market is motor vehicles & parts, which accounts for around 30% of the total market. The demand for motor vehicles & parts products is mainly driven by local consumer groups, as well as foreign tourists. The segment is also growing at a high rate, with an annual growth of 8.5% over the last few years. On the other hand, consumer electronics and household appliances witnessed a decline in sales of about 4% and 2.9%, respectively, over the last year. The main reason behind this decline can be attributed to the Indian government’s decision to impose a goods and services tax (GST) of 15% from July 1, 2018. Although the GST rate has yet to be determined, it is likely to be higher than the inflation rate of more than 3% that is currently taking place in India. Moreover, many Indian consumers are being discouraged from purchasing certain imported products because of the new tax. The resulting drop in sales in this category is expected to have a negative impact on the overall market.
YZ Asian Market Size and Trends – By Product Type
The YZ Asian market is largely divided into three major product categories: power tools and accessories, garden and outdoor equipment, and toys and games. Power tools and accessories, which make up around 36% of the total market, are mainly driven by growing domestic consumption, as well as international demand from companies manufacturing in this area. The market is also expecting a boost from the advent of the 5G mobile network, which is expected to become available in the region by the end of this year. On the other hand, the market for household appliances, which make up around 24% of the total market, is experiencing a decline due to a combination of factors, including a decline in domestic demand, higher imported goods, and the appreciation of the Indian rupee against the US dollar. The relative strength of the rupee against the dollar, however, has recently dipped below the critical level of 66 against the dollar, which is expected to result in a negative impact on the market.
YZ Asian Market Size and Trends – By Product Type – Continued
The automotive sector accounts for a further 2% of the YZ Asian market and is closely followed by electronic and mechanical appliances. The automobile market in India, which is the largest single Asian market, was almost shut down in October and November 2017, due to a nationwide strike. However, the growth of the Indian auto industry has picked up somewhat in recent months, and the market is now expected to grow at a pace of 7.6% over the next year. However, the growth of the sector is not expected to be sustained, and the annual growth of the automotive market is expected to peak at around 6.5% in 2022, before slowing down to a modest annual growth rate of 3% over the next five years.
YZ Asian Market Size and Trends – By Product Type – Concluded
The recreational equipment market, which makes up around 9% of the total market, is experiencing a period of rapid growth. Growth is expected to be led by the booming outdoor sector, which is estimated to expand at a rate of 18.1% over the next five years. The outdoor equipment market exhibits strong growth with strong price inflation and is therefore seen as a potential source of investment by domestic manufacturers. However, the outdoor equipment market is also very fragmented, and therefore is unlikely to yield strong market shares to any single manufacturer.
YZ Asian Market Size and Trends – By Application
The health and beauty care equipment market, which makes up around 5% of the total market, is expected to grow at a rate of 5.6% over the next five years. The market is however highly competitive, and therefore is likely to offer only moderate market shares to competing companies.
Key Takeaway
The YZ Asian market is expected to grow at a rapid pace over the next decade. The market is however highly competitive, and therefore is likely to offer only moderate market shares to competing companies. Growth will be led by the motor vehicles & parts, consumer electronics, and household appliances sectors.
