The consumer tech and durables market is looking relatively lackluster, according to the latest figures published by GfK. Sales are down, mainly due to inflation, but also due to market saturation and new consumer habits.
In the first half of 2023, the global market value for consumer tech and durables saw an overall decline of 6.3%, compared to the same period in 2022, reaching US$390bil (RM1.82 trillion). For the year as a whole, the decline is expected to be more moderate, at 3.4% overall, mainly due to inflation and market saturation. However, market value remains above 2019 levels, prior to the Covid-19 pandemic.
What’s striking is that all the sector’s subsegments are affected, starting with consumer electronics (televisions, sound bars, etc) and IT (computers, peripherals, etc), where revenue is down by 12%. For telecommunications (smartphones) and large household appliances (refrigerators, ovens, etc) revenue is down by 5%.
Inflation is the first reason cited by GfK experts to explain this trend, with price increases reaching nearly 30% in June 2023 compared to January 2020. However, consumers’ reluctance to buy new products varies from region to region. While sales are down in Developed Asia and Western Europe, they continue to grow in Eastern Europe and the Middle East.
The second factor that may explain the market’s slowdown is, of course, market saturation. With record sales during the pandemic years of 2020 and 2021, ownership rates have reached such a level in wealthy and developing countries that there are virtually no new markets left for manufacturers to conquer.
Finally, consumer appetite for sustainability and simplification is identified as a driver for long-term demand, with energy efficiency and sustainability, improved convenience and flexibility, and affordable premiumisation highlighted as particularly attractive qualities to consumers. – AFP Relaxnews
Credit: The Star : Tech Feed
