The market for the Technology. Some sectors still attract good interest from consumers, but many others have peaked and are now showing consistent negative signs globally. In Italy the minus sign is there, but with less lift. Even if the price increase distorts the values.
These are data that emerged from the last analysis made by GfK which continuously collects sales data for the Consumer Technology sector: Consumer Electronics, Photo, Telecommunications, IT, Office Equipment and Large and Small Appliances in over 70 countries worldwide.
According to Gfk, the global market in the first half of the year it saw a contraction of -6,3% in value, with a turnover of 390 billion dollars and for the whole of 2023 we see a contraction in value of -3,4%. The cause? The saturation of the market and the slowdown in demand.
Market saturation and slowdown in demand
“They weigh on the question globally the effects of the macro-economic context – characterized by the increase of cost of life – excess stocks and saturation of the demand linked to the record growth of the last few years” says a note from the institute.
Despite this, the market value is still above pre-pandemic levels and offers opportunities for growth in specific areas, the institute said in a statement.
The sectors that have suffered the most contraction
All Consumer Technology businesses reported revenue declines in the first half of 2023, compared to the same period a year earlier. However, the IT sector and the Small Appliance remain above pre-pandemic levels. Here are the trends in detail according to Gfk: Consumer electronics (TV, soundbar, etc.): -12%, Telephony (smartphones, etc.): -5%, IT and Office (laptops, hardware, printers, etc.): -12%, Small household appliances (fryers, mixers, etc.): -1%, Large household appliances (air conditioners, ovens, etc.): -5%.
The slowdown of the T&D market varies from region to region, due to differences in purchasing power and price levels. Thus, while Western Europe and the developed countries of Asia recorded a contraction in value sales of -6% and -11% respectively, Eastern Europe and the Middle East continued to grow in the first six months of 2023 Gfk says.
The Italian market contracted (-4,9%) in the first six months of the year
In Italy, the Consumer Technology market in the first half of 2023 shows a negative trend in value (-4,9%) and a turnover generated of 7,3 billion Euros. After the growth of recent years, the Italian market is also slowing down, but not in all sectors. Furthermore, if we compare the total performance with that of the first half of 2019, the trend in value continues to be positive (+12%).
Analyzing the performance of the various sectors, it emerges that the negative trend is mainly linked to the performance of Audio-Video, which records a heavy -34% and Information Technology, which sees sales in value down by -8%. For both sectors, the causes of this trend are well known: Audio-Video had seen strong growth in 2022 due to the "tail" of the Switch-off, while Information Technology paid for the strong demand that had in the years of the pandemic for Smart Working and distance learning.
La Telephony, the most important sector by turnover, recorded a positive trend (+3%) in the period between January and June 2023. The sectors of the Great Appliance and Small Appliances, which respectively mark +6% and +4% compared to the same period of 2022. However, it is observed that sales are growing in value because prices have risen sharply, but in quantity they fall by 10 percent (as from information from APPLIA Italia). Furthermore, it is the two- and three-digit growth in the sales of air conditioners, thus making the percentage rise (+6 percent). In reality, the volume sales of large household appliances are steadily falling. The online sales they remain stable at around 26% of the sector's turnover, but only the end of the year will tell us how much they will grow as a result of the major promotional events which generally push online purchases in the fourth quarter.
The most chosen: smart and energy-saving appliances, air fryers, robots
The products that continue to grow despite the difficulties are the ones that are characterized by energy efficiency and sustainability, major practicality. and flexibility or premium features at affordable prices.
- smart appliances, sustainable and energy efficient not only offer the consumer savings, but are perceived as affordable and of high quality. Especially in Europe, where energy prices are skyrocketing, energy efficiency is one of the most important factors in choosing Major Appliances. Value sales of refrigerators combined with label A, B and C, for example, increased by +77% in the first half of 2023 and freestanding dishwashers with the same labels grew by +37%. Another example is the air fryers – which consume less energy and offer healthier cooking – grew by +54% in the first six months of 2023. Products that make consumers' lives easier also continued to grow, such as robot vacuum cleaner with docking stations (+23%).
Consumers want more flexibility
Another long-term trend that is positively influencing the global market in 2023 – especially in the IT sector – is the desire to flexibility of consumers. Due to smaller workstations and the "workation" phenomenon (working from holiday resorts), sales of small keyboards grew by +11%, while standard formats recorded a contraction of -10%, in the first half of 2023. Even the keyboards and Bluetooth mouse are increasingly popular, with growth rates of +15% and +10% respectively compared to the same period last year.
Although the demand for premium products is not as strong as in 2022, i high-end models continue to perform better than the market average, especially in consumer electronics. For example, in the first half of 2023 i televisions 75-inch high-end TVs grew +5% globally, while the overall TV market is down -15%.
The powerful stimulus of promotions
Il time of purchase has become even more strategic and le promotions are of increasing importance to increase sales volumes.
“Promotional events like the Prime Day in Europe and the 6.18 in China had a positive impact on value market growth in the first half of 2023” observes Nevin Francis, GfK expert. “Although volume growth has not reached the levels of previous years, the weeks corresponding to these events continue to outperform the average week. As the end of the year approaches, Brands and Retailers should closely monitor sales dynamics to optimize inventory levels and identify segments and items to promote to maximize profits. A cautious but optimistic approach to promotions can capture new opportunities to increase sales despite the challenging environment.”
