Nuremberg, February 27, 2014 – The Western European Technical Consumer Goods market faced a sales decline of 3.1 percent to €58.3 billion in the fourth quarter 2013. Total volume of sales in 2013 amounted to €196.3 billion, a drop of 3.6 percent on a year-on-year basis. The Telecommunication and Small Domestic Appliances market achieved a sales increase. This is the result of the GfK TEMAX® Western Europe for Q4 2013 and full year of 2013.
The Telecommunication (Telco) market was the front runner in terms of sales growth among all sectors surveyed in the GfK TEMAX® Western Europe. Thanks to the impulse generator, smartphones, the Telco sector achieved the biggest increase in the fourth quarter as well as in the 2013 cumulative period. The Small Domestic Appliances (SDA) market also witnessed both a successful final quarter and total year. Apart from this, the year proved to be a mixed one for the Western European Technical market, with some great differences on a country to country level. Good developments were especially recorded in Portugal, Sweden and Spain.
Telecommunication: smartphones, the driver in the festival season
The Telco market achieved growth rates of 2.7 percent in October to December and 6.6 percent for 2013. Consequently, the sector experienced a good fourth quarter and very good total year. Additionally this was the strongest performance among all sectors surveyed in the GfK TEMAX® Western Europe. The sales volume of the final quarter of 2013 stood at roughly €12.3 billion and over the whole year a total of €41.3 billion was achieved. In Spain, Sweden, Portugal and Italy, the Telco market even grew by double digit figures. Smartphones proved to be the perfect Christmas gift. In the festival season, this was evident once again in many European markets, where consumers replaced their outdated feature phones with the latest high-tech devices. These appliances not only provide a complete entertainment package, but still facilitate the main function of communication. For the first time, the same is also available in budget price bands, such as devices with a dual core processor and 4 inch display offered at €99. Indeed, this was hard to resist and an easy decision for parents who were desperately looking for a gift that would not have to be returned to the retailer on December 27.
Please note Telco figures are with non-subsidized prices from Q1 2013 onwards. Back data were reworked accordingly.
Small Domestic Appliances: positive final quarter
The year-end saw sales of about €4.3 billion for the SDA market in the fourth quarter and a total of roughly €13.2 billion for 2013 as a whole. Sales growth generated between January and December stood at 1.5 percent, while in Q4 the growth rate even amounted to 2.4 percent. On a country level, the sales increase in Portugal should be highlighted, ending a negative trend which started in 2010. Despite a restrained festival season, Germany provided the highest growth impulse among all the countries surveyed in the GfK TEMAX® Western Europe. In Q4, vacuum cleaners were the most important growth driver in Western Europe. Specifically, robotic vacuum cleaners lead to a significant increase of sales in the segment. Traditional kitchen machines were also a notable growth driver with the biggest impact recorded in France, Italy and Germany. Additionally, liquidizer sales increased, with those models priced higher than €60 leading the way to significant growth compared to 2012. Solo toothbrushes showed continuous growth in 2013 including in the last quarter. Negative impulses came from hot beverage makers, especially pad and traditional filter coffee machines, irons, especially generators, as well as hair straighteners and epilators.
Major Domestic Appliances: Q4 brings recovery to pressured markets
Total sales volume in the Major Domestic Appliances (MDA) market in 2013 stood at roughly €30.5 billion, a decline of 1.4 percent on a year-on-year basis. However, the fourth quarter brought signs of recovery for the pressured markets. The overall development was steady compared to the prior year with a total sales volume of €8.1 billion and a growth rate of minus 0.3 percent. For many of the markets surveyed in the GfK TEMAX® Western Europe, the final quarter was a successful one. After Italy the other countries most affected by the economic crisis, Greece, Portugal and Spain, started to recover at the end of 2013 across all the product categories, including the built-in segment. Consumers’ price-sensitivity accounts for the decrease in prices over all categories in these countries. The one exception is Portugal, where prices increased. Contrary to the general trend, Germans focused further on premium products with a strong spotlight on energy efficiency.
Information Technology: facing the beginning of a new demand cycle
The Western European market for Information Technology (IT) generated a sales volume of roughly €17.5 billion in the fourth quarter, which was down by 3.6 percent on a year-on-year basis. All in all a sales volume of about €57.6 billion was achieved in 2013, which corresponds to a decline of 3 percent in comparison with 2012. On a country level, Portugal and Greece generated significant double digit growth rates in the final quarter. The Spanish and Swedish markets also showed positive development. In 2014 the Western European IT market is expected to show slight positive growth of 3 to 4 percent. In particular, the challenging southern European countries are likely to outperform the overall average market growth in Western Europe. Growth drivers are the new computing form factors like ultra thin, convertibles, detachables and all-in-ones, all touch-enabled. Tablet sales are expected to slow down, especially big screen form factors which are subject to a certain level of saturation, whereas small screen form factors will still continue to grow.
Office Equipment and Consumables: still no turnaround
The Western European Office Equipment and Consumables market (OE) witnessed a sales decline of 3.9 percent in the fourth quarter 2013 to €4 billion. Yearly sales volume amounted to €15.2 billion which corresponds to a decrease of minus 4 percent, compared to 2012. Only Germany, Greece and Sweden could buck this trend and achieved positive growth rates in the last quarter. For a couple of years now there has been a negative trend in the whole OE-market. At present there is no sign of a turnaround on the horizon with the printing and the consumables segment facing difficulties. However, laser MFD color appliances proved to be a bright spot at last. Since the end of summer this area of technology has scored positively and has in the meantime reached 3rd position in the printer market behind ink mfd and mono laser printer appliances. Whether or not the new generation of NFC (Near Field Communication) printers will stimulate the much needed impulse, remains one of the exciting questions in 2014. There are bound to be more brands launching new products with this application.
Consumer Electronics: better expectation for 2014
Total sales volume generated with CE products in Western Europe in 2013 was about €31.4 billion. This represents a decrease of 15.6 percent, compared with the prior year. Although, the negative trend flattened somewhat in the fourth quarter, it remained negative, being 8.1 percent down on a year-on-year basis, achieving a sales volume of about €10.3 billion. However, there are good signs of a market recovery in 2014. The World Soccer Championship in Brazil will have the expected positive trend on TV sales in June. This might prove to be a good opportunity to stimulate sales of second generation home use flat TVs, with bigger screens of 50 inches and above, improved display quality and 4k UHD. Connected audio remains the challenge for the sound market. We have already seen positive trends in all Bluetooth, Airplay and NFC segments for docking and mini speakers. This is also the case for table top audio and even for headphones. These trends might create the opportunity of less dependency on TV business in the Consumer Electronics sector.
Photography: High value digital cameras still in demand
Western European consumers spent a total of almost €2.0 billion on photographic products in Q4 2013, a quarter on quarter decrease of 21.6 percent. The full year market sales volume reached €7.2 billion, shrinking by 15.7 percent.
The photo market in Western Europe presents a fragmented picture. While segments that under strong pressure from smartphones where they are losing out badly on sales, high-value digital cameras are doing particularly well. In fact, top-quality digital camera sales increased quite substantially, depending on their target group and intended area of application. Advanced fixed-lens cameras were in high demand. These are cameras with larger image sensors [more pixels] and/or higher zoom cameras such as “travel zoom cameras (+20x optical zoom, but still slim). In general, cameras are becoming more connected and by the end of 2013, one in seven cameras sold will already be able to share pictures via an integrated WLAN.
Smartphones may be causing decline on the low end of the camera market, but they are also introducing more people to photography than ever before. This presents a unique opportunity for inspiring interest in many consumers in this field and may ultimately motivate them to buy increasingly high-end cameras.
GfK TEMAX® Western Europe: upward trend on the horizon
Although the Western European market faced a mixed year overall, a look back reveals a singular upward trends. This is true for individual sectors and countries, observed in the GfK TEMAX® Western Europe as well as for the economic conditions expected in 2014. The conclusion of the latest GfK consumer climate study shows that Europe is overcoming recession. In most of the countries, important indicators like consumers` economic and income expectations improved again by the end of 2013. Although willingness to buy is more volatile, it also shows a slight upward trend overall. Also other institutions, such as the EU-commission, are optimistic about the future. All in all, Europe is expected to grow again in 2014. This is also true for the EU-states most affected by the crisis like Italy, Spain, Portugal and Greece which are forecasting a slight increase in their economic power. As for the Western European Technical market, hope remains that it will better profit from the expected positive economic trends than in 2013.
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.
GfK TEMAX® Western Europe directly includes the following countries: Germany, Austria, Belgium, Spain, Netherlands, Portugal, Italy, France, Greece, UK and Sweden. Besides them, Denmark, Finland, Norway and Switzerland are represented by extrapolated data. All directly included country reports and press releases are available at www.gfktemax.com.
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