UAE: The Future Is Bright For Home AppliancesTrend Setter For The Gulf CountriesTrend Setter For The Gulf Countries

Canton Fair 16.04.2014

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GfK Retail and Technology Middle East FZ LLC | Consumer Choices China, Guangzhou April 2014

Contents

UAE Technical Consumer Goods Performance 20131

From Traditional To Modern Trade2

Key Product Trends3

Think Green; Energy Efficiency In The UAE4

2

3

4

UAE Inside The MENA RegionPopulation / number of households & people per household

5

MENA – Estimate Of 582 MiO Inhabitants & 113 454 HH In 16 Countries Large households provide solid ground for appliances sales to flourish in the years to come

1542820506

25688

1950220000

25000

30000

Number Of Households in Ths

48751578 2183 1099 739 229

5593490 495 325

63252353

6046

0

5000

10000

15000

0TR KSA UAE IR IL JO LB BH IQ KW OM QA PK EG MA TN DZ

# Persons Per HH

46

54 4

6 6 6 6 6 6 67

45 5

6

345678

# e so s e

6

0123

TR KSA UAE IR IL JO LB BH IQ KW OM QA PK EG MA TN DZ

Age Structure In MENAP: 60-70% Of The Population <30 Years OldMarkets extremely dynamic as young people will generate the new demand for home appliances

5% 3% 5% 5% 3% 10% 5% 2% 9% 6% 3% 4% 2% 3% 3% 4% 8% 6% 1%

71% 77%63%

71%59%

62%60% 72%

68%66% 66% 60%

77% 68%55%

61%69% 67% 79%68% 69%

65 + Age15-64 Age0-14 Age

24% 21%33%

24%38%

28%35%

26% 23% 28% 31% 35%22%

29%42% 35%

23% 27% 20%

7

DZ BH EG IR IQ IL JO KW LB MA OM PK QA SA SD SY TN TK AE

MENAP MDA 3: 7,141 Bio USD Business From Top Selling AppliancesUAE Ranks 7th In Revenue Generated From REF/WM/AC despite having the 10th largest population

1700 1236 761 727 522 505 345 345 228 179 179 150 116 98 49

MDA 3 Turnover In Mio USD

ACWMREF

8Saudi Arabia Egypt Israel Pakistan Iraq Algeria UAE Morocco Jordan Lebanon Kuwait Oman Qatar Tunisia Bahrain

How Did The Durables Market Fair In 2013?UAE Technical Consumer Goods

9

Value Contribution

UAE: Consumer Durables Market Positive In 2013Market growth of 7% reaching 3,838 Million USD!!!

FY 2012 v/s FY 2013 % Growth In ValueFY 2012 v/s FY 2013 % Growth In ValuePM (Market Value)

Jan – Dec 2013PM (Market Value)

Jan – Dec 2013SDA3% MDA

8% ACCE Photo

14%

14%

7%

White Goods

Small Domestic

TotalAC4%

OEMTG1%

CE14%

Photo5%

4%

4%

14%

IT

Air Condition (RAC)

White Goods

IT29%

OE2%

1%

0%

15%

Office Equipement

Telecom

29%Telecom

34%

7%

-6%

Photo

Consumer Electronics

UAE: Top Selling Categories For 2013Value Share by key product in UAE for the year 2013

32%32% 14%14%3%3%

14%14%

4%4%

114%4%11%11% 10%10%

UAE: Population Growth Sustains Strong Development In DAWeak East / South EU Economies produce influx of expats in the UAE

GfK Panelmarket AE

SMART-SMART-MOBILEPHONESMOBILEPHONESPTV/FLATPTV/FLAT

20092009 20102010 20112011 20122012 20132013

Value%Value%

27 027 0 27 127 1 27 927 9

Jan 12-Dec 12 -> Jan 13-Dec 13 Growth %Jan 12-Dec 12 -> Jan 13-Dec 13 Growth %Value%,Sales Value USDValue%,Sales Value USD

7,67,62 22 2

SMART-SMART-MOBILEPHONESMOBILEPHONESPTV/FLATPTV/FLAT

MOBILE COMPUTINGMOBILE COMPUTINGMEDIATABLETSMEDIATABLETSDESK COMPUTINGDESK COMPUTINGDIGITAL CAMERASDIGITAL CAMERASMONITORSMONITORS

10,210,2

27,027,0

12,212,2

27,127,1

13,413,4

27,927,9

11 611 6

31,731,7

11 111 1

31,931,9 2,22,2-10,1-10,1

21,521,57,17,1

-16,5-16,5

MOBILEPHONESMOBILEPHONESPTV/FLATPTV/FLATMOBILE COMPUTINGMOBILE COMPUTINGMEDIATABLETSMEDIATABLETSDESK COMPUTINGDESK COMPUTINGDIGITAL CAMERASDIGITAL CAMERASMONITORSMONITORS

PORTABLEPORTABLEMEDIA PLAYERMEDIA PLAYERVG CONSOLESVG CONSOLESAIR CONDITIONERAIR CONDITIONERCOOKINGCOOKING

5 35 3

21,821,8 23,123,1 21,021,0 16,816,8

11,611,6

10 410 4

14,214,2

11,111,1 ,,-21,8-21,8

-40,1-40,1-29,1-29,1

4,14,18 18 1

DIGITAL CAMERASDIGITAL CAMERASMONITORSMONITORSPORTABLEPORTABLEMEDIA PLAYERMEDIA PLAYERVG CONSOLESVG CONSOLESAIR CONDITIONERAIR CONDITIONER

COOLINGCOOLINGMICROWAVE OVENSMICROWAVE OVENSWASHINGMACHINESWASHINGMACHINESFOODPREPARATIONFOODPREPARATIONIRONSIRONSSHAVERSSHAVERS

2,42,43,33,3

7,77,72,72,7

5,35,3

223,23,2

7,67,6

5,25,2

2,52,5

4,74,7

5,65,65,65,6

2,62,6

4,14,1

5,35,39,29,2

2,82,8

3,93,9

4,24,2

10,410,4 8,18,114,514,5

7,27,217,917,9

21,221,211 411 4

COOKINGCOOKINGCOOLINGCOOLINGMICROWAVE OVENSMICROWAVE OVENSWASHINGMACHINESWASHINGMACHINESFOODPREPARATIONFOODPREPARATION

12

SHAVERSSHAVERSVACUUM CLEANERSVACUUM CLEANERSOthersOthers 10,710,7 8,88,8

2,52,5

8,08,0 8,78,7 12,112,111,411,4

7,87,810,810,8

IRONSIRONSSHAVERSSHAVERSVACUUM CLEANERSVACUUM CLEANERS

Modern Channels Solidify Their Position In UAELocal Market Structure developments Vs GCC Vs MENA

13

Channel Development: Modern Trade Value Share Development 2009-14 Shopping Festivals and Promotions Support Modern Retailers In Increasing Revenue

20092009 20102010 20112011 20122012 20132013Jan 14-Jan 14-Feb 14Feb 14

16 216 2 12 712 7

Small Domestic Appliances

20092009 20102010 20112011 20122012 20132013Jan 14-Jan 14-Feb 14Feb 14

Major Domestic Appliances

35,135,1 32,732,7 27,627,6 20,820,8 16,216,2 12,712,7

66 366 3 00

52,452,4 47,247,2 44,944,932,332,3

Value %Value %

79 279 2 83,883,8 87,387,3

El. Trad.El. Trad.IndependentsIndependentsTecSuperstoresTecSuperstores+ El. Chains+ El. Chains

66,366,3 70,570,5

64,964,9 67,367,3 72,472,4 79,279,2 ,,

33,733,7 29 529 5

47,647,6 52,852,8 55,155,167,767,7

14

29,529,5

Which Products Witnessed High Growth In 2013Key Feature Trends In Major And Small Domestic Appliances UAE

15

World Of MDA Key Feature Trends In MDA UAE

UAE MDA: 443 Mio USD Generated From White Goods Cooling through SBS sales and large fridges & washing machines from the washdry segment growth

4,1%4,1%

14,5%14,5%

17

8,1%8,1%

17,9%17,9%

UAE Cooling: Bottom Freezer Sales Rise Quickly Because Of EU Expats 2 Door Freezer Top still largest segment with 71% of total refrigerators value

COOLINGGfK Panelmarket AE

THS.USDTHS.USD

REFRIGERATORS WITH >600 NET LTRS+54% GrowthFRZ BOTTOM

+29% Growth

TOTALTOTAL

1DOOR1DOOR

14,514,5

1,11,1

54%54%

2 DR FRZ. TOP2 DR FRZ. TOP

2 DR FRZ. BTM2 DR FRZ. BTM

17,117,1

28,628,6

SIDE BY SIDESIDE BY SIDE 2,92,9

18

UAE Cooling: Multi Door Fridges Increase In Demand French door / 4 Doors reach more consumers as price competition makes them more affordable

COOLINGGfK Panelmarket AE NO OF DOORS

TotalTotal 14,514,5

SALES USDSALES USD

2013 / 2012 Growth %2013 / 2012 Growth %

11 1,11,1

2 TOP2 TOP

2 BTM2 BTM

17,117,1

26,126,1

2 SBS2 SBS

33

2,92,9

66,666,6

19

44 24,924,9

UAE Dishwashers: Niche Segment? Not So Much Anymore…Busy lifestyles push consumers towards DWRs / large families also influence # of place sets

GfK Panelmarket AE FS Dishwashers WITH > 14 Place sets+366% Growth Rate

DISHWASHERS

Jan 12-Dec 12 -> Jan 13-Dec 13 Growth %Jan 12-Dec 12 -> Jan 13-Dec 13 Growth %Sales USDSales USD

TotalTotal 23,823,8

FSFS

BIBUBIBU

23,823,8

22 922 9BIBUBIBU 22,922,9

20

UAE WMs: Front Loading WMs Preferred Prices of Wash Dry and large front loading units declines and spurs demand from consumers

FA FRONT

Higher Loading KGS >10Kgs+44% Growth

FA FRONT +17% Growth

Jan 12-Dec 12 -> Jan 13-Dec 13 Growth %Jan 12-Dec 12 -> Jan 13-Dec 13 Growth %Sales Value USDSales Value USD

TotalTotal 17 917 9 > 10 KG> 10 KG

FA FRONTFA FRONT

FA TOPFA TOP

WASHDRYWASHDRY

17,917,9

16,616,6

16,816,8

24 224 2

43,943,9

21

WASHDRYWASHDRY

SEMI/NASEMI/NA

24,224,2

17,017,0

UAE WMs: Front Loading Preferred Type Of Washing MachinesPrices of Wash Dry and large front loading units declines and spurs demand from consumers

SALES USDSALES USDFA FRONTFA FRONT

> 0 <=> 0 <= 7 47 4

WASHDRYWASHDRY SALES USDSALES USD

TotalTotal 24 224 2

2013 / 2012 Growth %2013 / 2012 Growth %

6 KGs6 KGs

> 6 <=> 6 <=

-7,4-7,4

26 026 0

TotalTotal

> 0 <= 6 KGs> 0 <= 6 KGs

> 6 <= 7 KGs> 6 <= 7 KGs

24,224,2

-36,0-36,0

13,113,1 6 6 7 KGs7 KGs

> 7 <=> 7 <=

26,026,0

> 7 <= 8 KGs> 7 <= 8 KGs

> 8 <= 9 KGS> 8 <= 9 KGS

13,113,1

49,249,2

30,530,5> 7 <=> 7 <=8 KGs8 KGs 31,131,1

> 9 <= 11 KGs> 9 <= 11 KGs

> 11 <= 13 KGs> 11 <= 13 KGs

30,530,5

-65,3-65,3

114,4114,4

22

> 8 KGs> 8 KGs 19,119,1> 13 KGs> 13 KGs

,,

592,0592,0

World Of SDA K F t T d I SDA UAEKey Feature Trends In SDA UAE

23

UAE: 135 Mio USD From Consumer Products In 2013Main Products Driving The Small Domestic Appliances Business

11,411,410,810,8

21,221,27,87,8

24

106,7106,7

Food Preparation: Food Processors & Kitchen Machines Rise In SalesKitchen Machines become more affordable and large house holds prefer them

FOOD PREPARATION KITCHEN MACHINES+46% Growth KITCHEN MACHINES WITH BOWL VOL

> 4 - 4.5 LtrsTotalTotal 21,221,2

+172% GrowthCHOPPERCHOPPER

FOODPROCESSORFOODPROCESSOR

HANDBLENDERHANDBLENDER

-0,1-0,1

24,424,4

22 422 4

> 0 <= 3,9 Litres> 0 <= 3,9 Litres> 3,9 <= 4 Litres> 3,9 <= 4 Litres> 4 <= 4 5 Litres> 4 <= 4 5 Litres

4-4.5 Ltrs4-4.5 Ltrs

HANDBLENDERHANDBLENDER

HANDMIXERHANDMIXER

KITCHENKITCHENMACHINEMACHINE

22,422,4

5,25,2

46,046,0

> 4 <= 4,5 Litres> 4 <= 4,5 Litres> 4,5 <= 4,6 Litres> 4,5 <= 4,6 Litres> 4,6 <= 6,6 Litres> 4,6 <= 6,6 Litres> 6,6 Litres> 6,6 Litres

4 4.5 Ltrs4 4.5 LtrsLIQUIDISERLIQUIDISER 13,613,6

172,4172,4

25

Deep Fryers: Healthy Eating Heavily Advertised Bringing New TrendsLow Oil Deep Fryers Rise Radically In Sales Over The Last 2 Years

DEEP FRYERSGfK Panelmarket AE LOW OIL

+29% Growth

LOW OILWITH SQUARE SHAPE

+47% GrowthTotalTotal

WITH LOW OILWITH LOW OIL

19,319,3

29,429,4ROUNDROUND

SQUARESQUARE

WITH MUCH OILWITH MUCH OIL -14,9-14,9

46 9%46 9%

SQUARESQUARE

46,9%46,9%

26

VC: Are Robot Vacuum Cleaners The Next Big Thing In UAE?Turnover growth attests to it despite being at the very early stages

VACUUM CLEANERS

ROBOT+107% growth rate

WITH HEPA FILTER+168% Growth Rate

TotalTotal

BARRELBARREL

10,810,8

11,811,8

EL. SWEEPEREL. SWEEPER

HANDHELDHANDHELD

-8,0-8,0

8,08,0

HANDSTICKHANDSTICK

ROBOTROBOT

83,783,7

106,7106,7

168,0168,0

INCLUDEDINCLUDED

27

SLEDGESLEDGE

UPR(BEATUPR(BEAT&BRUSH)&BRUSH)

9,09,0

5,05,0

,,

Espresso: From Tea Drinking To Espresso; 29% Growth 2013 / 2012As it is trendy to offer espresso at home, consumers look initially for affordable solutions

ESPRESSO MACH.

Sales Value USDSales Value USD

GfK Panelmarket AE

TotalTotal

PUMP POR.PUMP POR.CLOSEDCLOSED

PUMPPUMP

29,129,1

24,224,2

PUMPPUMPPOR. OPENPOR. OPEN

PUMP TRADPUMP TRAD

68,668,6

-46,4-46,4

PUMP COMBIPUMP COMBI

STEAM SOLOSTEAM SOLO

STEAM COMBISTEAM COMBI

1.359,71.359,7

4,94,9

28

STEAM COMBISTEAM COMBI

FULLAUTOMATICFULLAUTOMATIC

500,9500,9

18,418,4

Energy Efficiencygy yThink Green!!

29

Consumers Are Requested To Choose Eco-Friendly AppliancesConsumers Are Requested To Choose Eco Friendly Appliances Numerous campaigns in all Media

30

ESMA: Manufacturers Advertise & Push Energy Efficient Products Though at the very beginning of this transformation, opportunity is apparent for the industry

GfK Panelmarket AE Value Growth rates to previous year (in %)

TotalTotal

Jan 13-Dec 13Jan 13-Dec 13 Jan 13-Dec 13Jan 13-Dec 13COOLINGCOOLING WASHINGMACHINESWASHINGMACHINES

14 514 5 17 917 9

Jan 13-Dec 13Jan 13-Dec 13AIR CONDITIONERAIR CONDITIONER

TotalTotal 4 14 1TotalTotal

A+++A+++

A++A++

14,514,5 17,917,9

105,7105,7

65,865,8 134,3134,3

A +A +

AA

4,14,1

-32,2-32,2

-12,5-12,5

A+A+

AA

31,431,4 24,624,6

-6,3-6,3 -24,6-24,6

BB

CC

-13,3-13,3

0,10,1

BB

CC

8,58,5 27,927,9

-12,2-12,2 -9,9-9,9

DD

EE

-32,7-32,7

56,956,9

31

DD

OthersOthers

-98,5-98,5 -66,0-66,0

25,625,6 20,920,9

FF

OthersOthers

-31,6-31,6

10,610,6

Front Load WMs: A+++ Increases Exponentially In The Course Of 2013Manufacturers Drive Energy Efficient Products Since They Can Raise Prices Once Again

WASHINGMACHINES GfK Panelmarket AE Nov 11 - Dec 13FA FRONT Sales Value %

Jan 12Jan 12FebFeb1212

MarMar1212 Apr 12Apr 12

MayMay1212 Jun 12Jun 12 Jul 12Jul 12

AugAug1212

SepSep1212 Oct 12Oct 12

NovNov1212

DecDec1212 Jan 13Jan 13

FebFeb1313

MarMar1313 Apr 13Apr 13

MayMay1313 Jun 13Jun 13 Jul 13Jul 13

AugAug1313

SepSep1313 Oct 13Oct 13

NovNov1313

DecDec1313

13 313 3 14 214 2 11 711 7 10,710,7 10,510,5 9,69,6 12 112 1 11 711 7 12 512 5 14 314 3 13 613 6 12 512 5

23 723 7

5,35,3

13,313,3

19,619,6

4,44,4

14,214,2

20,020,0

6,86,8

11,711,7

20,720,7

5,95,9

10,710,7

22,722,7

7,37,3

10,510,5

20,920,9

7,67,6

,,

16,816,8

9,49,4

12,112,1

16,116,1

11,711,7

20,520,5

12,512,5

22,222,2

15,615,6

15,615,6

17,917,9

16,716,7

15,315,3

24,224,2

14,314,3

22,822,8

13,613,6

25,425,4

12,512,5

29 629 6

15,915,9

28 128 1

16,816,8 19,119,1 21,421,4 21,521,5 23,523,529,829,8 33,233,2 34,634,6

23,723,7 ,, 16,816,812,712,7

24,424,421,821,8

20,220,2 21,021,0

24,024,0 24,124,1 25,225,217,817,8

29,629,6

17,917,9

28,128,1

19 519 5

27,827,8

23 023 0

23,423,4

23 423 4

23,723,7

29 829 8

17,917,9

18,918,9 15,615,6 12,912,9A+++A+++A++A++A+A+AA

50,850,853,653,6 51,451,4 55,255,2 51,951,9 54,254,2 52,852,8 51,051,0

35,435,4 32,532,537,037,0 38,238,2

30,530,5 31,131,1 28,828,8 28,728,7

17,817,8

29,429,4

,,

26 326 3

19,519,5

23 523 5

23,023,0

23 523 5

23,423,4 29,829,823,823,8 26,226,2 26,726,7

AAOthersOthers

326,96,9 8,28,2 10,110,1 7,57,5 7,67,6 7,67,6 8,98,9 8,58,5 7,27,2 7,87,8 9,49,4 8,88,8 6,96,9 8,48,4 8,18,1 8,08,0 7,87,8 7,27,2

26,326,3

8,78,7

23,523,5

7,97,9

23,523,5

7,37,3

21,521,5

7,37,3

20,320,3

6,86,8

18,218,2

8,08,0

17,917,9

UAE SWOT Analysis

Strengths1. Portal to the Middle East Region2 P f t l tf t t t d t

Action Points1. If not already investing in UAE, need to start

at the earliest it is the window to the Middle2. Perfect platform to test new products3. Modern retail highly developed 4. Frequent shopping festivals support sales

at the earliest, it is the window to the Middle East

2 Focus In Modern Retail to assure high

Challenges1 C d t ti it f

2. Focus In Modern Retail to assure high visibility and exposure

3 Invest in the right product segments1. Consumers used to promotions; wait for discounts

2. Market consolidation around key retailers

3. Invest in the right product segments

4. Focus on energy efficient products to be h d f th d l t t th

33

ahead of the curve and relevant to the market developments

For Further Information:

Ilias KarampoikisIlias KarampoikisCommercial Director HHL | Consumer ChoicesGfK Retail & Technology Middle East FZ LLCT: +971 50 551 7952E: ilias.karampoikis@gfk.com