The Australian Technical Consumer Goods (TCG) market recorded solid value growth of 7.9% in Q2, 2015 according to GfK TEMAX® Australia. While it was the telecommunications category which enjoyed large double-digit value growth, this was backed up by both small and major domestic appliances which sustained their strong value performance.
GfK said that exchange rate changes played a key part in the value performance of the market, with the AUD dollar falling to its lowest point since 2009 compared to the US dollar. This led to local price rises as products became comparatively more expensive.
Prepaid resurgence and wearables growth
Telecoms was the leading growth sector in Q2, recording an extremely strong double-digit value growth for the second consecutive quarter. The trend was widespread but was led by rising average prices, a resurgence in prepaid smartphones and the continued evolution of the wearables market.
Retailer promotions within the non-specialist channel fuelled a 50% increase in sales of prepaid smartphones, compared to the same quarter last year. This increase meant prepaid smartphones enjoyed the highest share of the smartphone market since 2013.
Within wearables, it was the health and fitness segment that dominated, accounting for 90% of all wearable device sales. Wearables are an emerging market, with year-on-year sales up 239%.
SDA: Consumers opt for premium products
Small Domestic Appliances experienced another strong quarter of value growth, up 13% year-on-year. Even though hand-stick vacuum cleaners and blenders remain the key drivers of the sector, these are not the only growth segments. GfK said that the positive performance of small appliances is reflected by value growth across multiple categories; from coffee machines and toasters, through to electrical cooking pots. A shift towards higher priced products has helped drive this increase in value.
Cold weather has also supported the sales of seasonal products, such as electrical heaters and blankets. With cooler temperatures being recorded earlier in the year, the heating categories saw an earlier than usual uplift insales.
Major Domestic Appliances: Continued retailer focus sustains growth
Major Appliances continued to perform well in Q2 growing by 7% in value year-on-year. With the industry focusing strongly on this sector, this is the second strong quarter of growth, though the rate of growth slowed slightly in Q2.
Like small appliances, the growth was widespread and was driven by the premium market segments such as French door fridges, pyrolytic ovens and front loading washing machines.
The early cold weather also affected this sector, with dryers recording double-digit value growth. The premium heat-pump segment led the way, recording 27% value growth while holding an average price four times that of standard dryers.
Historically, Q2 is a peak period for dryers, accounting for 35% of annual sales.
IT: Mixed results for key IT categories
Information Technology recorded a modest year-on-year value decline of -2.1% in the latest quarter, reflecting a relatively stable level of spending for the overall sector.
Within IT, however, there were mixed trends between individual segments; mostly between portable PCs and media tablets. These two rather similar categories are now showing completely opposite trends to a year ago, with portable PCs showing strong double-digit growth while the decline in media tablets has accelerated.
Within portable PCs, devices with either detachable or convertible screens, also known as 2-in-1, have been performing strongly. This key market segment has seen a glut of new models released in 2015, with twice as many 2-in-1 models selling compared to a year ago. The development of the 2-in-1 segment may also be impacting on media tablets sales, given the many similarities between the two devices.
CE: Growth in audio but a slow-down in TV demand
The Consumer Electronics sector experienced a softer second quarter, following its stronger start to the year, recording a 7.5% year-on-year decline.
Overall demand for the key TV segment experienced a slow-down this quarter. The key factors behind this were the weak Australian dollar, contributing to the relatively high new range pricing, coupled with a focus on larger, higher-spec models. UHD/4K ranging has increased substantially, with sales accounting for close to 40% of the TV market’s quarter 2 market value.
The audio segment continued its strong start to the year – the solid overall value performance being driven by continued double-digit growth of the soundbar, bluetooth speaker and multi-room audio system segments. Wireless headphones also experienced positive growth, with their share of the headphones market doubling compared to last year; now accounting for more than a fifth of the segment’s value.
Outlook: expect a slow-down in the second half of 2015
Market growth is expected to continue in the latter half of 2015, though the rate is set to slow as it is anticipated that the key Telecoms sector will face softening demand in Q3. Small business spending, led by the release of a stimulatory federal budget, should help support sales in the more traditional categories.
The Survey
GfK TEMAX® is an index developed by GfK to track the technical consumer goods markets. The findings are based on surveys carried out on a regular basis by the retail panel of GfK. The retail panel comprises data from over 425,000 retail outlets worldwide. Since February 2009, GfK has also been compiling the GfK TEMAX® index at international level in more than 30 countries. It is the first index that includes all of the markets for technical consumer goods in different countries.