Household appliances play a central role in the Italian economic system and to sustain it in a complex market, the sector’s industrialists are calling for appropriate support tools
Article by Olivia Rabbi
The Italian household appliance supply chain is an economic powerhouse worth EUR 20.1 billion in added value, equal to 1% of GDP, employing over 505 thousand people. These numbers are enough to highlight the key role played by the household appliance sector in the Italian economy, and to call strongly for measures to support, sustain and enhance the sector in the national economy. Not to mention the key role in the broader decarbonisation agenda. This is emphasised in the strategic report ‘Il valore della filiera degli elettrodomestici per la competitività e la transizione sostenibile e circolare del Paese‘, produced by The European House Ambrosetti on behalf of APPLiA Italia, recently presented in Rome.
The weight of inflation on the household appliances market
The current economic trend remains complex, starting with the sharp drop in demand that has been going on for over two years in Italy and Europe, combined with factors undermining the industry’s competitiveness. Supporting households in the energy transition by preserving jobs and promoting growth in Europe is becoming increasingly important. Against this backdrop, the extended home appliance supply chain has considerable economic and social weight for the country: according to the Teha Report, in 2022 it was responsible for 1% of Italy’s GDP, generating €20 billion in added value (comparable to other key Made in Italy sectors such as textiles, footwear and dairy) and €114 billion in turnover. These numbers, the Report underlines, are relevant not only at a domestic level, but also in the international context. Italy ranks third in the EU-27 for household appliance exports, with over EUR 6.8 billion generated in 2022, and is the second EU country in terms of trade balance in the household appliance sector.
Italian leadership also in the components sector, ranking second in the EU-27 for exports worldwide with a value of EUR 3.8 billion in 2022. Overall, Italy is the second EU country for exports in the household appliance sector, with a value of almost EUR 11 billion: household appliances and components for household appliances are Italy’s 12th largest export category in 2022 out of a total of 268.
The foreign appreciation of Italian appliances was also recorded by the survey administered by Teha to the more than 120 members of APPLiA Italia: what clearly emerges is the recognition of the distinctive traits of quality, design, craftsmanship and know-how of the Italian household appliance industry, which is appreciated worldwide and especially in North America and Asia. The sector, the Teha Report emphasises, is nevertheless facing a number of challenges, primarily changes in consumption habits in the short and medium term. Due to the inflationary crisis, the years 2022 and 2023 saw a reduction in sales volumes and a propensity of consumers to buy cheaper products. While spending on household appliances had grown by an average of 34% between 2019 and 2022, according to the Teha Report, there was a setback from 2023 onwards, which affected the volume trend for both large (-1.8%) and small appliances (-1.4%), with different dynamics for the different segments. This trend seems to persist in 2024 as indicated by APPLiA Italy’s sell-in data with a result of -20.5% of units sold from December 2021 to July 2024.
Sustainability target
Digitalisation and the direct relationship with the consumer will play a key role in the growth of the household appliance sector, together with the sustainable and circular transition. According to Teha, eight out of ten operators identify environmental sustainability as the main opportunity for the sector.
The Italian household appliance park has ample room for improvement in terms of energy performance: just over 3% of appliances installed in homes are in high energy classes. Starting from this consideration, Teha has elaborated a model from which it emerges that increasing the penetration of the best technologies available on the market in the household appliance park can lead to a reduction in annual energy consumption of up to 14 TWh and in CO₂ emissions of up to 4.7 million tonnes, an amount that is close to the annual emissions of the entire city of Milan. The most conservative scenario, Teha reiterates, which envisages the replacement of around 2 million appliances per year including washing machines, dishwashers, fridges and freezers, enables a reduction in energy consumption and CO₂ emissions of more than 17% by 2030; an amount that is equivalent to eliminating the annual emissions of the entire municipality of Brescia by 2030. To this end, the Italian household appliance industry has taken steps to achieve greater levels of sustainability, including specific targets in its investment plans, both in terms of making production processes more efficient and improving the energy efficiency of products.
More dialogue with the consumer
Energy saving and sustainability are the pillars supporting the path towards replacing outdated household appliances. But there is no shortage of obstacles, starting with the difficulty of getting consumers to perceive the importance of choosing more efficient appliances that can bring important economic benefits in terms of savings over time, cutting consumption (and bills). The Teha Report puts four lines of action on the table to encourage this process. Firstly, it is essential to promote a new appliance culture that raises consumer awareness of the significant environmental and economic benefits of investing in high-quality, efficient appliances instead of energy-intensive, underperforming ones. Incentivising this transition requires educational campaigns, incentives to replace old appliances and social responsibility policies for sustainable production, communicating these commitments to consumers to strengthen brand trust. Not only that, it is also essential to support less affluent families through special concessions and information tools, supporting them in buying higher quality and more efficient products. At the supply chain scale, it is essential, according to Teha, to foster synergies and collaboration between producers and retailers in order to enhance the value of premium products, through an exchange of information on the potential value they bring in terms of environmental and social benefits, so that consumers do not focus only on the purchase price and highlight the savings and sustainability benefits of premium products.
Finally, government support for the industry, through tax credits and dedicated funds, to support competitiveness, innovation and sustainability in the national white goods supply chain, which is characterised by a high degree of Italianism. In addition to an eco-incentive designed for washing and refrigeration appliances, support will also be provided for Italian and European quality products such as those of the important national cooking district, which ranks second in Europe (first for cooker hoods) in terms of both production value and exports.
«Despite the difficulties of a market that has been in severe contraction for over two years, in Italy as in the whole of Europe, and with objective competitive obstacles to production against non-EU countries, we continue to invest in innovative and sustainable products, capable of making a real difference in terms of reducing consumption for families and, therefore, energy savings for the country, thus also contributing to its safety. This is why we believe that our industry deserves the full attention of the institutions», said Paolo Lioy, president of APPLiA Italia.
«Support for the renewal of the installed stock of household appliances would help families(starting with those most in difficulty), would contribute to environmental goals, and would support a fundamental and identifiable supply chain».
