What on Earth is going on in the world electronic goods market?

By Martin Vedris

SYDNEY, NSW: We now know how much of what electronic goods are selling in all four corners of the global market, due to the newly launched ‘GfK-Digital World’ forecasting service by GfK Retail and Technology, but the news isn’t all growth positive.

GfK Retail and Technology reported today in its new forecasting service that the global electronic goods market will decline by over 2 per cent in 2009, compared to 2008, reaching US$681 billion.

The worldwide market research organisation reported that this market decline will hit two regions particularly hard, with North America down 12 per cent and Eastern Europe down 36 per cent.

In value terms globally, just three product categories were delivering value growth this year, LCD TVs, Laptops and HD DVD players (Blu Ray) — in 2008 more than 10 products were driving the market.

GfK Retail and Technology concluded that it is not just the global financial crisis and the accompanying reduction in demand that resulted in the decline — price erosion and a scarcity of new offers were offered as key reasons as well.

GfK Retail and Technology reported that we are at the end of a cycle of innovation which had brought a multitude of new technologies; particularly Portable Navigation Devices, down 15 per cent in 2009 compared to 2008 in value, Multimedia Players, down 11 per cent, and Digital Cameras, down 11 per cent,” said GfK Retail and Technology Australia strategic planning manager, Gwenno Hopkin.

In a case of diminishing returns, GfK Retail and Technology also reported that between January and September, there was sustained demand for LCD TVs with almost 100 million sets being sold around the world. However, GfK Retail and Technology stated that even with volume growth of 33 per cent, value is declining by 3 per cent due to a huge price erosion of -27 per cent.

The TV demand remained strong in Q3 2009 with 34 million LCD sets sold. However, the GfK-Digital World’s study highlights how price erosion is slowing down at -21 per cent versus Q3 2008 and the average price is US$764.

Since the beginning of the year, the screen size mix has not changed dramatically according to the GfK data. But there was a major trend shift in Q3 with the middle and small screen sizes taking significant shares. Sales of 20-23 inch LCDs doubled in a year; the 30-34-inch is outpacing the market and remains the leading segment with a 36 per cent share.

Demand in Q4 is expected to follow a positive trend of 32 per cent, with LCD TV set sales reaching 47 million. Global LCD TV sales in 2009 should reach 145 million in total.

GfK Retail and Technology’s ‘GfK-Digital World’ forecasting service draws the data from a database of manufacturing sales data in the US and retail sales data in the rest of the world.

Working with the CEA, the US industry authority, this new global database provides real-times sales from over 400,000 retailers worldwide. It also mean that all companies with an interest in the IT, Telco and CE markets can compare, contrast and forecast their global portfolios in detail for the first time.