July 18, 2024

Extended Warranty Market Is Estimated To Witness High Growth Owing To Increasing Sales Of Consumer Electronics And Automotive Industries

Market Overview:

An extended warranty refers to a period of protection that covers the costs of repairs and/or replacement of consumer products beyond the standard manufacturer’s warranty. It provides coverage against mechanical breakdown, electrical failure, and accidental damage from handling. Extended warranty products are commonly sold for consumer electronics such as smartphones, laptops, home appliances and automotive components. With the increasing sales volumes of consumer electronics and automotive industries globally, the demand for extended warranty services is growing steadily.

Market Dynamics:

The extended warranty market is witnessing considerable growth owing to two major drivers:
Firstly, the increasing consumption of consumer durable goods across regions is fueling market growth. Consumer electronics such as smartphones, laptops, and home appliances have become an integral part of daily life. As the replacement cycles of these products are decreasing, consumers are looking for extra coverage against unexpected costs of repairs.
Secondly, the rising prices of new vehicles and vehicle components are prompting buyers to purchase extended warranty policies. The inclusion of complex new technologies increases the chances of breakdowns in automotive parts. Offering affordable and flexible extended warranty options helps reduction in ownership cost and assures peace of mind to consumers.

SWOT Analysis
Strength: Extended warranty market provides additional coverage on electronic products beyond the basic manufacturer warranty period. It protects the customers from expensive repairs arising due to defects. Online purchase and claims process offered by major players makes the process convenient.
Weakness: Many customers are not aware about the benefits of extended warranty. High premium charged by few players restricts the market growth.
Opportunity: Growing sales of smartphones, laptops and other consumer electronics provide significant growth opportunities. Developing markets in Asia Pacific and Middle East & Africa are untapped which can be targeted.
Threats: Manufacturers providing longer warranty periods can reduce the demand for extended warrants. Economic slowdown can decrease discretionary spend affecting the market.

Key Takeaways

The Global Extended Warranty Market Demand  is expected to witness high growth, exhibiting CAGR of 6.6% over the forecast period, due to increasing demand for protection of expensive electronic products. Growth in sales of smartphones, laptops and other consumer electronics significantly contributes to the market growth.

Regional analysis

North America dominates the extended warranty market currently owing to large consumer base and high adoption of consumer electronics in the region. Asia Pacific is expected to exhibit the fastest growth over the forecast period supported by rapidly growing middle class population and their rising spending power in countries like China and India.

Key players

Key players operating in the extended warranty market are ASSURANT INC., American International Group, Inc., AXA, AmTrust Financial, Asurion, CARCHEX, CarShield LLC, Endurance Warranty Services LLC, Edel Assurance, SquareTrade, Inc., and Others. These players adopt strategies like partnerships, mergers, acquisitions and new product launches to expand their business and customer base.

Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it