Annual Report Sustainable Development Report ... - Groupe SEB

Strategic overview of
the small domestic equipment sector
World leader in small domestic equipment, Groupe SEB operates in two different,
though complementary worlds: small electrical appliances and cookware.
Both of these worlds involve the deployment of similar expertise and skills.
Both are concerned with the relevance and quality of products, brand management,
and a strong command of retail networks. Both bring the Group into close proximity with consumers.
All our brands share in your day-to-day life... Your world is our world.
A changing market
Over the last three years, our market has seen a rapid
and profound transformation, marked by three key features:
– convergence, reinforcement and globalization of retail chains;
– store shelves flooded with Asian products;
– a clear polarization of the market between entry-level
products and high-range products, with an equally sharp
divergence in prices.
This polarization of the market, which has already
been described and commented upon by the Group, sharpened
further recently. This was due largely to foreign exchange
parities, and resulted in significant changes to our trading
environment, now characterized by:
– the growing strength of extremely competitive Chinese
manufacturers who supply the entry-level segment;
– a weakening of producers who no longer command the
production chain and no longer design new products that
create added value;
– growth in top-end ranges, which has led to the emergence
of new rivals specialized in niche markets;
– acquisition opportunities for industry operators who pursue
a strategy of innovation, competitive performance, expansion
and good service.
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Opportunities to be seized
The still-fragmented small domestic equipment
sector has embarked on a phase of consolidation in which
Groupe SEB aims to play an active role. Its powerful brand
portfolio and vast product offer – both unrivalled in the
industry – combined with its global reach and diversity of retail
channels, give it exceptional stability and growth potential
which can be strategically exploited.
Chinese competition is today a structural reality in
our market. It is leading to a shake-up in our industry in which
it is likely that only the fittest will survive. Moreover, recent
market developments show that while the hard discount model
continued to spread in 2005, especially in Europe, it is also
reaching its limits. With prices stabilizing, some hard
discounters are now showing a renewed interest in more
worthwhile branded products to attract customers who
demand quality. Meanwhile, there is a rising demand for
top-range and even luxury products, helped by the growth
of selective distribution channels.
Some facts about our industry
Average hourly rate in China €0.5
Average hourly rate in France €25
This is a ratio of 1-to-50.