The global extended warranty market is estimated to be valued at US$123.4 Million In 2022 and is expected to exhibit a CAGR of 6.6% over the forecast period of 2022-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Extended warranties are service contracts that provide additional protection to consumers beyond the standard warranties offered by manufacturers. These warranties cover repair or replacement costs of products within a specified time period. The market for extended warranties is driven by the increasing demand for product protection and the desire for peace of mind among consumers. Extended warranties offer benefits such as extended coverage, repair services, and expedited replacement of faulty products. With the rising adoption of electronic gadgets, appliances, and vehicles, the demand for extended warranties is expected to grow significantly.
Market Key Trends:
One key trend in the extended warranty market is the growing popularity of online warranty providers. Online platforms offer convenience, ease of comparison, and competitive pricing for extended warranties. Consumers are increasingly turning to online channels to purchase extended warranties, bypassing traditional brick-and-mortar retailers. The digitization of the warranty purchasing process allows for a streamlined and efficient experience for consumers, driving the growth of online warranty providers.
Extended Warranty Market: Porter’s Analysis
Threat of New Entrants: The extended warranty market faces a moderate threat of new entrants. While there are no significant barriers to entry in terms of capital requirements or regulatory restrictions, established players in the market enjoy economies of scale and strong brand recognition, making it challenging for new entrants to compete.
Bargaining Power of Buyers: Buyers in the Extended Warranty Market have a moderate bargaining power due to the availability of multiple providers and the ability to compare prices and terms. However, the switching costs associated with changing warranty providers often limit the bargaining power of buyers.
Bargaining Power of Suppliers: Suppliers of extended warranties, such as insurance companies and warranty service providers, hold a moderate level of bargaining power. These suppliers often have well-established networks and expertise, giving them leverage in negotiating favorable terms with manufacturers and retailers.
Threat of New Substitutes: The threat of new substitutes in the extended warranty market is relatively low. Extended warranties provide an added level of protection and peace of mind for consumers, which traditional warranties or repairs cannot offer. As a result, the demand for extended warranties remains strong.
Competitive Rivalry: The extended warranty market is highly competitive, with numerous players vying for market share. The presence of large insurance companies and specialized warranty providers intensifies the competition. This competition results in aggressive pricing strategies and promotional activities to attract customers.
Extended Warranty Market: Key Takeaways
The global extended warranty market is expected to witness high growth, exhibiting a CAGR of 6.6% over the forecast period of 2022 to 2030. This growth can be attributed to the increasing adoption of consumer electronics and appliances, which drive the demand for extended warranty services.
In terms of regional analysis, North America is expected to be the fastest growing and dominating region in the extended warranty market. This is primarily due to the high consumer awareness and willingness to invest in extended warranty coverage for expensive electronic devices, such as smartphones, laptops, and home appliances.
Key players operating in the extended warranty market include ASSURANT INC., American International Group, Inc., AXA, AmTrust Financial, Asurion, CARCHEX, CarShield LLC, Endurance Warranty Services LLC, Edel Assurance, SquareTrade, Inc., and others. These key players leverage their strong market presence, extensive distribution networks, and technological advancements to gain a competitive edge in the market.
In conclusion, the global extended warranty market is poised for significant growth in the forecast period due to the rising consumer demand for added protection and the increasing adoption of consumer electronics. Key players in the market employ competitive strategies to maintain their market share and cater to the evolving needs of consumers.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
