Growth for the Australian TCG market: first time in 3 years
The Australian Technical Consumer Goods (TCG) market recorded revenue growth of 2.4% for quarter 3, 2014, making this the first quarter to show value growth in over 3 years. The growth was led by double-digit increases in key sectors, Telecommunications and Small Domestic Appliances (SDA).
It was a mixed quarter for the Australian economy. The Australian dollar fell in comparison to the US, while inflation and unemployment both dipped following rises in the previous quarter.
The Australian TCG market recorded value growth for the first time since 2011. The impact of new model launches on the Telecommunications sector was significant, while the SDA sector also performed strongly, led by the vacuum cleaner and blender segments.
Telecommunications: Strong take-up of new models
The Telecoms sector recorded significant double-digit growth in quarter 3, 2014, led by new model launches within the quarter.
A fifth of all smartphone value came from models released within the quarter, with the biggest individual smartphone launch in GfK Australia’s history being recorded in quarter 3. The new phone releases have also come at a higher price, helping drive value growth in the market. Smartphone prices have risen by over $100 since quarter 3, 2013; a growth of nearly 20%.
A key trend to note in smartphones is the move towards bigger screens. In quarter 3, 2014, the value generated by phones with a screen size of 4.5” or larger rose by 67% on last year and accounted for nearly two thirds of all smartphone value.
Small Domestic Appliances: Vacuums and blenders underpin growth
Vacuum cleaners - the largest of the small appliance segments - were one of the main drivers of value growth for SDA. Bagless canister vacuums generated revenue growth for the first time in over a year, while the rapid take-up of hand-stick vacuums continued into the quarter.
Blenders also helped fuel the overall value increase for the sector. On-the-go personal blenders and blenders with cooking functions were particularly popular.
The impact of a late dip in temperature at the end of the winter was also noticeable, with a late increase in sales for electrical blankets and heaters.
Major Domestic Appliances: Cooking and dryers stabilise market
After consecutive quarters of moderate decline, the MDA sector grew 1% in value during quarter 3, 2014. This growth in value came despite a decline in volumes, as average prices rose due to a shift towards premium products in most MDA categories.
The cooking and dryers areas are the key highlights for this quarter. Within cooking, pyrolytic ovens were a key proponent of value growth and now represent nearly as much value as non-self-cleaning ovens.
For dryers, it is the heat pump segment which gained in value and now accounts for nearly one fifth of all dryer value.
In dishwashers, prices rose by 7%, as the premium brands increased in share, while in hobs and hoods, prices jumped by 6%, as high-priced features such as induction and canopies took up a greater share in the market.
Even fridges, which was in overall decline, showed some bright spots with both the bottom mount and French door segments recording value growth.
Information Technology: Mobile PCs up, but tablets take a hit
The value of the IT sector remained relatively flat in the latest quarter, showing a modest decline of -0.3%.
While most individual segments performed positively, a sudden slowdown in the sales of media tablets resulted in a decline of the overall sector. Value decline of tablets was particularly steep – reaching double-digits - with the decline in volume exacerbated by a move to smaller screens and a softening of average prices.
In contrast, the recovery in sales for mobile computing accelerated this quarter. The largest of the IT segments, this was the first quarter of value growth for mobile computing since 2011.
Consumer Electronics: Big screens and wireless technology
The consumer electronics sector declined by 6% in value, though there were pockets of growth within the individual segments.
For TVs, the demand for super-large screens continues to drive the value recovery of the segment. Three quarters of all TV revenue in the quarter came from TVs sized 47” and above. The move towards bigger screens and higher specifications has led to an overall price increase of 7%. However, it should be noted that like-for-like prices of TVs within key high-end segments is still declining.
An important feature is UHD/4K which, at its premium prices, has helped add value into the market and now accounts for nearly a fifth of the TV market’s value. In addition to several high profile promotions linked to UHD/4K TVs, the increasing take-up has been supported by the launch of a wide range of new models, at an increasingly broad range of screen sizes.
High-end segment growth has also impacted positively on the audio systems segment, where Network Music (or ‘multi-room’) systems account for nearly a fifth of the market value, as manufacturers and retailers continue to increase their focus on wireless technology. Within this category alone, models that dock or stream wirelessly account for nearly 80% of the value of the segment.
Market recovery expected to continue into the Christmas quarter
The steep value increase in the telecoms sector is expected to continue into the Christmas quarter, and should off-set declines in revenue elsewhere. However, the performance of the tablet market will be a key factor in whether the market as a whole finishes the year in growth.
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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. All reports and press releases are available at www.gfktemax.com. If information from this press release or www.gfktemax.com is cited, GfK TEMAX® should be explicitly indicated as the source.
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