Published Date : 14 Jun 2023
The global extended warranty market size accounted for USD 139.84 billion in 2022 and it is projected to attain around USD 294.7 billion by 2030, expanding at a CAGR of 9.77% between 2022 and 2030.
The extended warranty market refers to the industry that provides extended warranty services for various consumer products. An extended warranty is a service contract or agreement offered by the manufacturer or a third-party provider that extends the warranty period of a product beyond the standard manufacturer's warranty. The extended warranty market has grown significantly over the years due to several factors. Firstly, as consumer electronics and appliances become more complex and expensive, consumers are increasingly looking for ways to protect their investments and minimize the risk of expensive repairs. Extended warranties offer peace of mind by providing coverage against unforeseen breakdowns or malfunctions beyond the standard warranty period.
North America dominated the market with the largest market size in 2022. The growth of the region is attributed to the increase in awareness of the expiration of the original warranty and taking the protection of their products by buying an extended warranty. The increasing prevalence of buying luxury products will tend to the higher demand of the extended warranty market.
North America, particularly the United States, has a well-established extended warranty market. The presence of a large consumer electronics and automotive industry, coupled with a high level of consumer awareness and disposable income, drives the demand for extended warranties.
The extended warranty market in Europe is also significant, with countries like Germany, the UK, and France leading the way. The region has a strong automotive industry, and extended warranties for vehicles play a crucial role. Additionally, the growing adoption of consumer electronics and appliances contributes to the market's expansion.
Asia-Pacific expected significant growth in the market with shared revenue in the forecast period. The growth of the market is attributed to the rising technological innovation in this region. The rising disposable income in the population and increase in lifestyle tends to buy the products for their daily needs and these will be expected to increase in the demand for the extended warranty market.
The Asia-Pacific region is witnessing rapid growth in the extended warranty market. Countries like China, Japan, South Korea, and India are major contributors to the market's growth. The region's increasing middle-class population and expanding consumer electronics market are key drivers for extended warranty services.
Extended Warranty Market Report Scope:
|Details||USD 153.5 Billion|
|Projected Forecast Revenue in 2030||USD 294.7 Billion|
|Growth Rate from 2022 to 2030||CAGR of 9.77%|
|Largest Market||North America|
|Forecast Period||2022 To 2030|
|Regions Covered||North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa|
High-cost repairing services
The rising cost of repairs is a significant driver for extended warranties. Repairing high-end electronic devices, appliances, or vehicles can be expensive, and extended warranties help mitigate these costs by providing coverage for parts and labor.
Many consumers are using their devices and products for longer periods before upgrading, especially for big-ticket items like cars and appliances. Extended warranties offer additional coverage during these extended lifecycles, ensuring that the product remains protected over a longer period.
Overlapping coverages and price sensitivity
Extended warranties often come with an additional cost, which can make consumers price sensitive. Some customers who are price sensitive take the risk of potential repairs or replacements rather than pay for extended coverage, especially for lower-cost or less complex products. In certain cases, extended warranties may duplicate or overlap with existing warranties or consumer protection laws. Consumers may question the need for an extended warranty if they already have adequate coverage from the standard manufacturer's warranty or statutory rights.
Penetration of customized warranty packages along with the availability of services on e-commerce platforms
Offering customizable warranty packages can be a significant opportunity for extended warranty providers. Consumers have different needs and preferences when it comes to warranty coverage. Providing options such as extended coverage duration, additional services, or coverage for specific components can attract a diverse range of customers.
The growth of e-commerce and online shopping provides an opportunity for extended warranty providers to reach a broader customer base. By offering easy online purchase options, transparent pricing, and streamlined claims processes, providers can enhance customer convenience and accessibility.
Challenge: Less awareness about the market
Consumers are not interested in the value-added services in underdeveloped countries. This is the main challenge in the growth of the extended warranty market. Many consumers are skeptical about the value and benefits of extended warranties. Some perceive them as unnecessary or consider them a way for companies to generate additional revenue. Limited awareness about the coverage and terms of extended warranties can also hinder market growth.
Major Key Players:
By End User
By Distribution Channel
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