financial report and registration document 2011 - Groupe SEB

1.3. BUSINESS SECTORS
As a global leader in small domestic equipment, Groupe SEB deploys its
strategy via a portfolio of diversifi ed and complementary brands in multiregion
or local markets. Groupe SEB stands out from its main rivals by being
present in both the small domestic appliance sector (which accounts for
70% of its sales) – estimated to be worth approximately €29 billion – and
cookware (a sector worth around €9.5 billion). These fi gures, which vary
signifi cantly in relation to those published in 2010, correspond to a new
defi nition of the world market in question, with greater coverage in terms of
both geography and market segments. Therefore, they include more specifi c
data on all emerging markets (such as India, South-East Asia, the Middle
East, etc.) and incorporate, for instance, soya milk makers within product
families. Soya milk machines were not previously included, but they represent
an estimated market of €500 million worldwide.
Overall, the small domestic equipment sector is characterised by:
� low-to-moderate, yet steady, demand in the majority of mature markets –
where although the equipment rate is already high, it is heterogeneous in
terms of product families. This demand is, however, mixed and driven by
strong reactivity to innovation (new products and concepts), by the need
to upgrade the range in search of more status-related products, and by
the desire for basic products at low prices; At the same time, demand is
sharply on the rise in emerging markets (double digit growth in Asia and
almost-double digit growth in Latin America). These markets are in an
equipment phase and their intense growth is fuelled by rapid urbanisation
and the development of the real estate market, booming middle class
access to consumption, development of modern retail distribution, etc.;
� an average sale price close to €55 for a small domestic appliance in
developed countries, being accessible for most consumers and requiring
no or very limited use of credit;
� shorter product use cycles in addition to an increasing average equipment
rate in certain categories which are driving these renewal markets;
� steady and increasingly unavoidable increase in industrial partnerships
between manufacturers of small domestic appliances and actors of various
mass consumer goods, especially through joining forces to propose new
offerings and services. Development of the single-portion coffee concept
is a signifi cant example;
� tighter market fundamentals, as mass retailing increasingly imposes a
low price policy and continues to exert pressure on supply, pushing many
products toward the entry-level end of the spectrum. This results in little
or no innovation and a race to expand among manufacturers/suppliers.
While such trends have been the norm in the USA and the UK for many
years, this phenomenon is beginning to spread into other markets;
� the emergence of new consumer trends worldwide: more “Western” in
Asian or South American countries, more “ethnic” in Western countries,
back to “home-made” and control over food in Europe, heightened
environmental awareness, etc.;
Financial Report and Registration Document 2011
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Presentation of the Group
Business sectors
Breakdown of the small domestic equipment market, by
product family
Cookware 24%
Food preparation 10%
Beverage preparation 10%
Electrical cooking 11%
Sources Estin & Co- Groupe SEB
7% Linen care
10% Personal care products
10% Home comfort
18% Home care
From a geographical viewpoint, the global market of Small Domestic
Equipment does not present any real homogeneity because it is fragmented
into numerous national/regional markets. These are fuelled by a complex
and multi-faceted retail distribution network that varies depending on
regional consumption habits, the maturity of markets, targets or product
ranges and the development of distribution systems: (hyper/supermarkets,
specialist retailers, department stores, traditional points of sale, high-end
boutiques, etc.), as well as the rapid development of alternative distribution
channels (the Internet, factory shops, own-brand stores, discounters, etc.)
in recent years. Online sales have experienced particularly rapid growth.
For more than a decade now, a growing part of the production of small
domestic appliances has been located in countries with low production costs,
especially in China, due to the availability of low-cost labour. For certain
products, stemming mostly from assembly processes (toasters, coffee fi lters,
kettles, hair dryers, etc.), nearly all global manufacturing is based in China. In
fact, the small size of these products makes it easy for them to be shipped
over long distances at very reasonable costs and therefore to be competitive
in their destination markets. This phenomenon is more evident on entry level
or low value-added products.
In recent years most markets have seen greater pressure to offer price
reductions and promotions, with a signifi cant rise in discount products, which
are more and more often sold under retailer brand names.
GROUPE SEB
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