“Great opportunity for expansion”

The emerging markets in Asia are reporting substantial growth in home improvement, despite or perhaps because of the economic crisis Double-digit growth characterized the DIY and garden markets in the countries of Asia up to 2008, the year of financial crisis. How did things continue to develop after that? The crisis caused less damage to the industry than had been feared. DIY International asked Mariam Sandouka, who is a close observer of the region as an analyst at Euromonitor, to give an assessment of the situation. Do you have any information about the impact of the global economic crisis on the DIY and garden market in these countries? Mariam Sandouka: The region as a whole was not hugely impacted by the global economic recession. It actually managed to register value growth in US $ of 13 per cent in 2008, and a compound annual growth rate (CAGR) of almost 11 per cent in value between 2003 and 2008. This growth was pushed by emerging markets in the region that included India, China and Malaysia, which all registered double-digit growth rates throughout the period under consideration. In the current economic downturn, more consumers in the region are undertaking DIY projects to improve their homes, rather than hiring contractors to do the job. This is in large part due to consumers wanting to save the high cost of hiring specialist builders and other professionals. What is more, an increasing number of consumers now see great value in learning DIY skills as they can be put to use again when other projects arise around the house. Thus growth in the region’s emerging markets continued in countries like China, Malaysia, South Korea and even Singapore, albeit at a slower rate than in 2007. India, on the other hand, continued with its double-digit growth rates, despite the overall market being affected by the recession, since DIY and garden was still a niche market there. You are forecasting a growth rate of some 50 per cent in the region 2008-2013. What are the reasons? The overall US-$ value CAGR anticipated in the region is almost 9 per cent. China, followed by India, are the countries expected to push this high growth rate. It was anticipated that China’s economy would show signs of recovery as early as 2009, followed directly by the recovery of the real estate market. Furthermore, the country continues to invest in city improvements – housing, water, electricity, roads – to accommodate the large numbers of people who are migrating to the cities. This…