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Home appliances, also referred to as domestic appliances, electrical appliances, or household appliances, are machines that assist in household functions such as cooking, cleaning, and food preservation.

There are two categories of home appliances: major appliances and minor appliances. Major appliances comprise high-value electrical equipment such as refrigerators, freezers, air conditioners, washing machines, and microwave ovens, commonly known as white appliances. Minor appliances include coffee/tea makers, food processors, toasters, vacuum cleaners, water dispensers, etc. Small appliances contribute the most to the volume of sales. They come with a short lifespan, and consumers are often easily swayed, willing, and happy to exchange their small appliances for new models each year.

To have a global perspective on household appliances, we use a flowchart to see how various factors like market size, revenue mix, key players, evolving trends, demand centers, and production centers influence the global perspective.

Demand Dynamics

Demand for household appliances is driven by disposable income, preferences for a good lifestyle, and the need for convenience in daily chores. The demand exists in both the original market (first-hand goods) and the replacement market (second-hand items). Products like air conditioners, refrigerators, and washing machines have become necessities, thus occupying a larger share of the replacement market. If we compare the growth rates of the large-scale manufacturing sector, we find that the electronics market, including home appliances, has seen changes over the years.

In FY23, the electrical equipment sector in the LSM recorded approximately a 22.5% YoY decline (FY22: ~8.8%). This was accompanied by a ~2.3% YoY decline (FY22: ~1.3% YoY increase) in per capita Gross National Income, from PKR ~192 mln to PKR ~188 mln. Moreover, the production of electrical equipment was down ~23.2% YoY in FY23 (SPLY: ~5.9% YoY increase), highlighting overall demand contraction observed during the year.

Superfluous increases in electricity bills, hyperinflation, exchange rate devaluation, mistrust in the government, and negative growth in Pakistan have resulted in low purchasing power for buyers. This has shattered the confidence of the business class, leading to political instability and a decline in the demand for home appliances over the last 1.5 years. Previously, there was a rush of people to buy air conditioners before the start of the summer season in March and April, but now markets are not experiencing the same footfall.

Major appliances contribute approximately 70% of the home appliance sector’s revenue, with refrigerators being the main contributor. In the small appliance market, kitchen appliances like blenders, multi-cookers, toaster ovens, food processors, and tea and coffee makers are adding to the market share.

Almost two years ago, salesmen earned higher commissions from daily sales of air conditioners and refrigerators. However, the current economic downturn has led to a significant drop in commissions. One salesman in a wholesale outlet in Saddar said, “I was earning Rupees 8,000 to 10,000 a day in commission for selling refrigerators, air conditioners, deep freezers, and other small appliances. Now I hardly get Rs. 2,000 to 3,500 a day due to the absence of buyers, especially for air conditioners during the summer season. Skyrocketing gadget prices, high food inflation, and endless increases in electricity bills have severely impacted the home appliance market.”

A gap of Rupees 5,000 to 10,000 exists between wholesale and retail prices of large electronic gadgets used in homes, such as air conditioners, refrigerators, deep freezers, food factories, blenders, TVs, and washing machines. New customers are targeted to achieve profit margins because old buyers cannot be easily targeted. Direct and indirect job layoffs of around 10,000 workers in the home appliance industries have occurred due to a deep decline in sales and the unavailability of imported parts. People who used to allocate budgets of Rupees 100,000 to 150,000 for dowry items are now struggling to afford even the smallest gadgets like a 6 cubic feet refrigerator, 32-inch LED TV, juicer blender, washing machine, and iron. A six cubic feet double door fridge now costs Rupees 50,000 to 55,000 compared to 25,000 to 30,000 two years ago. Similarly, washing machines that cost Rs. 10,000 to 15,000 two years ago now cost Rupees 20,000 to 24,000. Many home appliances have become out of reach for the middle and lower-income classes. Only the wealthy can now enjoy these luxuries. Sales have decreased by 40% due to price hikes and power tariffs. The weather in different provinces also plays a significant role in air conditioner sales dynamics. In urban areas, high electricity bills, food inflation, power tariffs, imported spare parts, low wages, and small house sizes have compelled people to use cooling devices minimally. However, the low purchasing power has forced people to avoid buying necessary gadgets and to limit their use even if they own them, highlighting a sharp decline in consumers’ purchasing power.

Average prices of major household appliances have gradually increased over the years due to high raw material costs and rising inflation in the country. Refrigerators, air conditioners, and deep freezers are among the highest-valued products in the major appliances range. The prices of split ACs, washing machines, refrigerators, water dispensers, and microwave ovens have increased during FY23.

Pakistan’s household appliance sector is dominated by local and international players, including PEL, Arcelik (Dawlance), Orient, Haier, Waves, and Singer. These players have a significant share in the major appliance market, while in the small appliance market, other Chinese and local brands also contribute a fair share (GEEPAS, etc.). Certain players, such as Gree, who focused on one or two products, are looking to expand their product lines.

The sector is organized yet competitive. Some big players like Dawlance, Haier, and Samsung have international associations/shareholding, strengthening their presence in the local market. Local players like PEL, Waves, and Singer are also listed on the PSX, reflecting the organized structure of the market players. These companies have also partnered with renowned international players in certain product categories.

The sector is brand-driven in nature. Each product in the major appliances segment has unique functionality that drives brand consciousness. Market shares of different players can vary across different products in the sector.

Although the sector is dominated by the organized segment and has immense potential to grow, the local industry has still not developed to the level of manufacturing complete units locally. Many major components of electronic appliances are imported and assembled domestically.

Since the sector is brand competitive, pricing and marketing strategies play key roles in attracting market share among different product segments. Innovation and technological advancements are crucial for growth in this market. The household appliance sector is dominated by well-recognized brands and requires extensive capital investment, creating high barriers to entry.

Restrictions on opening letters of credit have also become a disincentive to invest in the home appliance business. In Karachi, one of the production units has been suspended for the last six months. Now, two factories in Lahore are meeting market demand, further pushing up home appliance prices. This sales decline could take sales down by 40% to 60% or even 70%, presenting a gloomy picture.

Data from the large-scale manufacturing sector shows that production of fridges and air conditioners fell from 723,868 and 245,354 units in July-March FY23 to 1.027 million units and 400,333 units, respectively, in the same period for FY22.

The President of Karachi Electronic Development Association (KEDA), Muhammad Rizwan Irfan, said, “I do not think that buyers will turn up in large numbers due to high prices and high cost of living. Much will depend on the sales volume of sacrificial animals this year compared to last year.”

Due to the cash crisis, people will opt for repairing and maintaining old gadgets rather than purchasing new items. Currency devaluation against the dollar has made home appliances too expensive, and only assembly, not manufacturing, is taking place in production units, depending on the arrival of imports. Now, people are buying 1.0-ton ACs instead of 1.5-ton, using them only to lessen the heat for 1-2 hours instead of continuous use. Even this limited consumption results in soaring electricity bills.

Sales of Waves home appliances decreased to 8.8 billion in 2022 from Rupees 2.425 billion in 2021, while profits increased to 48 million from 32 million in the same period. The demand side decline is due to the current economic recession, high cost of living, food inflation, cash crisis, production costs, high power tariffs, weakening Pakistani currency against the dollar, and price hikes in both the domestic and international economies.

On the supply side, production units have faced controlled operations due to the scarcity of imported inputs as a result of import restrictions by the State Bank. Dealers and assemblers attribute the decline in consumer presence to the phenomenal increase in food prices. They say, “Buyers are highly perturbed by the rising cost of living and don’t have surplus cash to buy extra and luxury items.” Consumers have already cut down on food intake and do not have extra to spend on home appliances. Political instability has also contributed to this decline. Many customers who bought these items on installment are now becoming defaulters. The government must reduce import duty so that the production cost of domestic home appliances becomes affordable for consumers.

Many people are not using air conditioners, refrigerators, and washing machines excessively, resorting to need-based consumption. Even so, it seems that people have no choice but to revert to a more natural lifestyle without these gadgets. People are selling their electronic home appliances, even during the warranty period, at 30-40% less than market prices due to high electricity bills, which prevent them from using these gadgets. It is better to sell them during the warranty period to get money to combat food inflation. Solar panels are a substitute for electric power. Those with enough budget and space are opting to install solar panels on their rooftops, using them to beat the heat with nonstop air conditioner and other appliance use. Others are trying to live within their means in a very natural way. Perhaps the industrial revolution of mechanization disturbed the world economic order, and after the pandemic, we are finding inspiration in the simple, safe, peaceful, and prosperous life of our ancestors. The pre-industrial lifestyle, where work was done by hand, including all kitchen work, washing clothes, and growing food, is now inspiring the present generation, as they seek to rid themselves of the stressful life.

The home appliance industry in Pakistan has faced significant challenges due to a combination of inflation, currency devaluation, increasing electricity costs, and rising unemployment. Here is how each factor has impacted the industry:


  • Cost of Production: Inflation has led to increased prices for raw materials and components, raising the cost of manufacturing home appliances. This reduces profit margins for manufacturers.
  • Consumer Prices: Higher production costs are often passed on to consumers, making home appliances more expensive and reducing affordability and demand.

Currency Devaluation:

  • Import Costs: Many components and raw materials for home appliances are imported. The devaluation of the Pakistani Rupee makes these imports more expensive, further increasing production costs.
  • Price Instability: Fluctuating currency values create price instability, making it difficult for manufacturers to set stable prices, leading to uncertainty for both businesses and consumers.

Increasing Electricity Costs:

  • Manufacturing Costs: Home appliance manufacturing is energy-intensive. Rising electricity costs increase operational expenses, squeezing profit margins.
  • Operating Costs for Consumers: Higher electricity prices deter consumers from purchasing energy-consuming appliances, impacting sales of products like air conditioners, refrigerators, and washing machines.


  • Reduced Consumer Spending: Higher unemployment rates lead to reduced disposable incomes, limiting consumers’ ability to purchase non-essential items such as home appliances.
  • Economic Uncertainty: Unemployment contributes to broader economic instability, reducing consumer confidence and spending power.
Overall Impact

The combination of these factors creates a challenging environment for the home appliance industry in Pakistan. Higher costs of production and reduced consumer purchasing power lead to lower sales volumes and squeezed profit margins. Many manufacturers may struggle to maintain profitability, leading to potential downsizing or shutdowns. This, in turn, could exacerbate unemployment, creating a vicious cycle.

Strategic Responses

To cope with these challenges, companies in the home appliance industry might consider:

  • Cost Optimization: Streamlining operations and adopting more efficient manufacturing processes to reduce costs.
  • Local Sourcing: Reducing reliance on imported components by sourcing more materials locally.
  • Product Diversification: Offering a range of products at various price points to cater to different consumer segments.
  • Energy-Efficient Products: Focusing on energy-efficient appliances to appeal to consumers looking to reduce electricity costs.

The industry’s ability to adapt to these economic pressures will be crucial for its sustainability and growth in the challenging economic landscape of Pakistan.