3. MARKET OVERVIEW
3.9 Analysis of the Small Appliances Market in the Kingdom .1 Market outlook for the Small Appliances market in The Kingdom
3.9.2 Competitive landscape and Company’s operations in The Kingdom
The Saudi Small Appliance market is more concentrated than the broader Electronics and Appliance market, as shown by the relative levels of the Herfindahl-Hirschman Index (a common measure of market concentration which is used to determine market competitiveness) for both markets as of 2021G (about 1,757 for Small Appliances, compared to 486 for Electronics and Appliances).
United Electronics Co (with its brand Extra) also dominates the country’s Focus Small Appliance landscape (commanding a 27.8% market share in 2021G), capitalizing on its wide product range within the Electronics and Appliance category in order to generate footfall and sales for small appliances, within the overall strategy discussed in the last section of this report. This is followed by the AlSaif Gallery (27.1% market share in 2021G), with its significant growth in Focus Small Appliances segment in the review period (2019G-2021G) and the company’s strong brand Edison, across most of the fast growing categories such as Food Preparation Appliances, fryers, oven categories and hot beverages. This is followed by Saudi Company for Hardware (Saco), with a 16% market share in 2021G, on the back of a strategic direction focused on continued expansion, broadening of its product portfolio, and emphasis on e-commerce. These were followed by United Yousef M Naghi Co Ltd (and its brand Eddy) with a 9% market share, and Hamad Al-Manea Trade Co. (and its brand Almaea) with 6% in the same year. Other smaller chains like XCite, Sheta and Saif, Blackbox and hypermarkets together contributed to the remaining 15% of the small appliances market in The Kingdom. In terms of number of outlets, AlSaif Gallery is the leader with 56 outlets as of 2021G, followed by Extra and Saco, with 47 and 34 outlets, respectively in the same year.
As opposed to broader Non-grocery Retail sector, which experienced widespread store closures and a halt/delay in most firms’ expansion plans over the historical period 2019G-2021G, the Small Appliances sector in The Kingdom continued to witness the expansion of physical outlets from leading players, reflecting healthy growth in the segment over this period.
For instance, AlSaif Gallery opened 13 new outlets between 2020G and 2021G, while Extra added five new stores over the same period, and Saco opened four new outlets in 2020G (while no information have been received on any new store openings in 2021G). Nevertheless, most major players in the Small Appliance market took measures to increase inventory, logistics and operational efficiency, as well as expand their e-commerce capabilities (either through proprietary websites or online marketplaces), not only as a way to address the impact of the COVID-19 pandemic on the segment, but also in order to lay the foundation for stronger expansion as growth of the Saudi economy gradually increases over the medium to long term.
The competitive environment for Saudi Small Appliances is also influenced by the expansion of channels that are non- traditional to the segment (like grocery retailers or e-commerce), although to a lesser extent than that observed within the broader Electronics and Appliances market. As of 2021G, the Grocery Retailers (principally hypermarket chains like BinDawood, Panda and Carrefour) accounted for 8% of total sales of focus small appliances segment in the country in value terms. The share of small appliance sales through this channel has been gradually increasing due to hypermarkets’
growing offering of product lines at competitive prices. Despite the rising share small appliances sold online in the Saudi market, the e-commerce channel represented only 2% of total sales of small appliances in the country in 2021G, although the importance of this channel is set to continue growing over the medium to long term, while representing 7.4% of the company’s total sales.
Against this backdrop, AlSaif Gallery was able to take advantage of the favourable market dynamics shaping activity in the Small Appliance segment, based on its growth-driven strategy that led the company to increase its total number of outlets and total floorspace by 78% and 86%, respectively during the period 2019G-2021G. At the same time, AlSaif Gallery continued to emphasize differentiation as a main competitive advantage against the rest of players, through its offering of modern focus small appliances that are innovative and customized to the local Saudi usage and culture. With strong control over the product development process, AlSaif Gallery ensures a shorter innovation cycle (resulting in faster adjustment to market demand and trends) and higher margins (through the elimination of middlemen in the product value chain). At the same time, this provides AlSaif Gallery with an advantage in terms of its relationship with its suppliers (which is closer and more integrated compared to a simple retailer-wholesaler relationship), while also supporting the firm’s marketing efforts (by providing consumers with a differentiated experienced catering to their lifestyles).
This was facilitated by AlSaif Gallery’s ownership of its own portfolio of brands, which totalled 27 brand names as of 2021G, including Edison, a household name in the Saudi Small Appliance market. Through constant connect with the market, AlSaif Gallery began with customizing electric pressure cookers to cater to the local Saudi cuisine, attracting large number of customers and led to a significant growth in the Company’s revenue.
The competitive landscape in the Saudi Small Appliances market (focused categories) over the forecasted period 2021G-2026G is set to continue evolving, as players adjust to the new post-COVID realities of the market. As the Saudi economy continues to recover and households gradually rebuild their finances, leading players in the segment are expected to focus on more affordable brands, the offering of discounts and mega sales, and the promotion of online sales. At the same time, competition from other channels is expected to intensify as Modern Grocery Retailers continue to broaden their small appliance portfolio, and pure players continue to expand into the segment (in line with global and regional trends).
In this context, differentiation will be a critical factor in order to stand out amidst increased competition in the Saudi Small Appliance market, favouring players able to provide a value proposition that, while taking into account temporary household income limitations, provides consumers with more benefits (both tangible and intangible) for their money.
Table No. (3.7): Competitive Position of Leading Players in the Saudi Small Appliances Market, 2021G
Retailer Number of
outlets Own Brands Market Share
(RSP) Rank in Category
eXtra 47 Class Pro 27.8% 1
Al Saif Gallery 56 Edison, iCafe 27.1% 2
SACO 34 Homix 15.5% 3
Eddy 28 - 9.4% 4
Al Manea 19 - 5.6% 5
Others (Including XCite, Sheta and Saif, hypermarkets and other smaller retail chains) - - 14.5%
Source: The market consultant estimates from Passport (2022G edition), primary and secondary research
3.10 Analysis of the Kitchenware (Incl. Serveware) Market in the Kingdom 3.10.1 Market drivers and trends for Kitchenware (inc. serve ware)
The total market size for the Saudi Kitchenware including serve ware market (hereinafter cumulatively referred to as Kitchenware market) reached SAR 1.1 billion (US$293 million) in 2021G, up from SAR987.1 million (US$263.2 million) in 2019G. This represents a CAGR of 5.5% in value terms between 2019G and 2021G, which ranks amongst the highest for any segment within the Saudi Non-grocery Retail sector). The robust performance of the segment over this period was on the back of the following factors:
Increasing trend towards staying and cooking at home caused by the outbreak of the COVID-19 pandemic;
Kitchenware purchasing patterns specific to Saudi households with short replacement cycles (e.g. families in The Kingdom usually renew their kitchenware every year, to be used in family gatherings typically hosting large numbers of people) and strong seasonal demand especially around Ramadan, Eid and the “back to school” period; and
Active promotional activities including price discounts, store events, and offers to replace old kitchenware sets with new ones In addition to these factors, economic, demographic and market drivers have also been supporting the expansion of the country’s Kitchenware market over the long run. These include:
Long-term increase in The Kingdom’s total number of urban households (which have recorded a CAGR of 1.9% between 2010G and 2021G):
Expansion of real estate activity in the country (which is backing sales of homewares to equip the new units entering the market); and
Growing per household consumer expenditure on glassware, tableware and Kitchenware (at a CAGR of 3.7% between 2010G and 2021G).
These factors are earmarked within evolving preferences of Saudi consumers regarding homewares, where younger generations seek personalization of products following modern and contemporary styles (due to the influence of the Internet and social media), yet still adjusted to Saudi usage and traditions.
Backed by the gradual reopening of the economy and the expected steady improvement in consumer confidence and disposable income levels, the Saudi Kitchenware segment is anticipated to expand at a CAGR of 4.4% in value terms over the forecasted period 2021G-2026G, to reach SAR1.37 billion (US$365 million) by 2026G. Besides the aforementioned trends that will drive the segment’s growth during the forecasted period, new factors coming into play during the post- pandemic period will contribute to shape the dynamics of the Kitchenware segment over the medium term. These include,
Greater focus on quality particularly for products designed to be in longer contact with edibles, like Food Containers,
The intensification of the health and wellness trend will be reflected on growing demand for products made of materials that are “green”, biodegradable and healthy,
Continuous product development and launches by the leading players in the Saudi Kitchenware segment,
In Dinnerware, the trend is towards the search for more colourful and unique texture and designs, compared to plain basic products,
For Beverageware (including flasks), the most important trends include the move towards natural materials, BPA free (especially for children), and connected products (e.g. water bottles connected to apps that measure hydration levels),
Cutlery will continue to see a drive towards quality products (e.g. Japanese cutlery) driven by rising incomes of the Saudi population,
The expected accentuation of the move towards health and wellness will also impact the Cookware category through higher demand for products like non-toxic, non-stick cookware (e.g. porcelain), or BPA- free products, as well as those that are eco-friendly and recyclable. In addition, Cookware will continue to experience the emergence of new brands, designers and original equipment manufacturers (OEMs), supported by social media influencers acting as trend setters,
For food containers, growth will be driven by new innovations such as those that are collapsible, having multiple compartments, or allowing food to be heated.
For Kitchenware, growth will be driven by rising demand for gadgets and smart items, where the market is anticipated to become increasingly competitive due to higher activity from retailers like hypermarkets and department stores.
Despite the increasing share of online sales expected in the Kitchenware category over the post-COVID period, consumers will still value the ability to feel and see their products before purchase, especially in the case of retailers with a strong brand, and those offering the possibility to refund and/or return their products, Increasingly, Saudi families will continue searching and preferring products that are suitable for modern lifestyles, such as multifunctional cooking supplies.
Table No. (3.8): Kitchenware (inc. serve ware) in The Kingdom, 2019G, 2020G, 2021G, 2022G and 2026G
Indicator Unit 2019G 2020G 2021G 2022G 2026G CAGR
2019G-2021G CAGR
2021G-2026G Kitchenware (inc. serve ware) – Value, RSP SAR Mn 987.1 1,040.3 1,100.0 1,146.8 1,367.2 5.5% 4.4%
Source: The market consultant estimates from primary and secondary research
Table No. (3.9): Kitchenware (serve ware) sub-categories in The Kingdom, 2019G, 2020G, 2021G, 2022G and 2026G
Indicator (Value, RSP) Unit 2019G 2020G 2021G 2022G 2026G CAGR
2019G-2021G CAGR
2021G-2026G
Food Storage SAR Mn 166.0 174.4 187.0 195.0 233.0 6.1% 4.5%
Cookware (Ovenware and stove top cookware) SAR Mn 216.7 240.5 253.0 266.2 327.8 8.1% 5.3%
Kitchenware SAR Mn. 120.0 125.8 132.0 138.3 167.5 4.9% 4.9%
Cutlery SAR Mn. 155.4 158.5 165.0 167.8 181.2 3.0% 1.9%
Dinnerware SAR Mn. 190.2 195.0 209.0 217.4 256.5 4.8% 4.2%
Beverageware SAR Mn. 138.9 146.1 154.0 162.2 201.1 5.3% 5.5%
Source: The market consultant estimates from primary and secondary research