Back to press release overview
28 February 2013
Q4 2012: Minor growth as Telco remains the leading sector
Results of the GfK TEMAX® Western Europe for the fourth quarter of 2012
Nuremberg, February 28, 2013 – The overall Technical Consumer Goods (TCG) market in Western Europe achieved a sales volume of €56.3 billion in Q4 2012. This corresponds to an increase of 1 percent compared to the previous year. According to GfK TEMAX® Western Europe, with sales of €190.7 billion in 2012, the total year showed slight growth of 0.2 percent. The different countries within Western Europe experienced mixed developments.
In Q4 2012, Telecommunication remained the strongest sector in terms of growth within GfK TEMAX® Western Europe. Smartphones drove this market and accounted for double digit growth rates in Q4 2012 and throughout the year. Consumer Electronics and Office Equipment and Consumables, on the contrary, currently lack product groups that would drive positive growth. When comparing country performance, differences still exist between the South, which is especially affected by the economic crises, and the northern states, which are doing comparatively well.
Telecommunication: Double digit sales growth
With an increase of 10.3 percent in Q4 2012, the Western European Telco sector achieved the strongest growth of all sectors within the GfK TEMAX®. Telco sales on the basis of non-subsidized prices amounted to nearly €7.1 billion between October and December. The annual balance, with a total sales volume of €22.9 billion and growth rate of 11.4 percent, is even more positive.
The ongoing good performance of smartphones is key to success. It is both the entry price bands up to €150 and the top end over €400 where demand for smartphones grows fastest. While on the one hand this makes a change for today`s owners of mobile phones attractive, it also stimulates consumers who already own a first generation smartphone to upgrade their device. Today`s model line ups are superior to their predecessors in many ways: while the displays are of a size of up to 5inch, the bodies become slimmer to compensate growing size, their built in cameras have a better resolution and record videos in Full HD standard, while higher transmission rates and dual or quad core processors make surfing the internet more enjoyable.
Information Technology: “Breakthrough” of media tablets in 2012
The IT sector generated a growth rate of 6.5 percent in Q4 2012, corresponding to a sales volume of €18.2 billion. The total growth rate in 2012 was 3.9 percent, amounting to €59.4 billion. In light of the challenges posed by saturated markets, and high household equipment, this is certainly a good result.
The main reason for the positive result in the IT hardware market was the significantly increased demand for ultra-thin notebooks and media tablets. Especially the latter have seen a breakthrough in 2012. Demand continuously rose over the year and reached the highest sales in Q4 2012. These innovative products are fashionable and trendy and attractive price points generate additional demand. GfK expects an overall positive market development for the IT sector in 2013. Hardware innovations together with growing demand towards software and services are set to stimulate the market.
Small Domestic Appliances: The year closes with strong plus
Western European consumers spent a total of €4.9 billion on Small Domestic Appliances (SDA) in Q4 2012. This corresponds to a growth of 6.2 percent, compared with Q4 2011. The sales in 2012 amounted to €15.1 billion, a plus of 3.9 percent.
The UK, Germany and France closed the year with solid growth. At the same time, the Southern European markets of Spain, Italy, Portugal and Greece saw their markets shrink.
Traditional kitchen machines remain a solid growth driver in the European SDA market. Despite declining prices for fully automatic espresso/coffee machines sales volume increased, as demand grew disproportionately, especially in Germany. Also, portioned filter coffee makers reached growth due to many promotions, particularly in France and the UK. Additionally, innovations push sales: in the Netherlands, switchable bean containers, a new type in the coffee machine segment is in demand. Waterjets were successful in Germany, driven by innovations, and in the UK, hair removal devices with light impulse technology (IPL) experienced further growth. GfK expects respective increases for the SDA market in 2013 to come from a mix of “traditional” growth drivers and innovative solutions.
Major Domestic Appliances: Efficiency, convenience and capacity support growth
Overall, the Major Domestic Appliances (MDA) segment in Western Europe registered sales of €8.3 billion in the fourth quarter of 2012, which corresponds to an increase of 1.4 percent. This is based on the positive development in Austria, Germany, the UK and Sweden. The full year sales figure showed a slight growth of 0.8 percent and a total value of €31.5 billion.
The positive development in Austria and Germany was supported by the further growing consumer interest in big capacities, efficiency and convenience. In the laundry segments, high energy efficiency, heat-pump dryers and loading capacities of 7 kg and above were market drivers. Steam ovens, flexible induction and design-oriented hoods are growing niches in the cooking area. The Swedes focus stronger on high value products that are water and energy efficient and have low noise levels. In the UK, energy efficiency is still not a driver but consumers tend to buy bigger capacities like side by side fridges.
Photo: Appliances with high quality features on the upswing
Western European consumers spent slightly more on photo products in the fourth quarter of 2012 than in the previous year. Total sales in Q4 2012 amounted to €2.5 billion, a plus of 1.2 percent. The Western European Photo sector experienced a mixed performance between January and December. In 2012, sales declined by 2.3 percent, amounting to a total volume of €8.4 billion.
There were two positive and strengthening trends by the end of 2012, namely the increasing turnover contribution of changeable lens cameras and, in line with this, an increasing demand for interchangeable lenses. Besides these segments, the relatively new fields of compact system (mirrorless) cameras and SLR cameras are generating value growth. On the top of that, higher featured and attractively designed fixed lens cameras are adding value to the market. These effects have helped to compensate the ongoing decline of lower end appliances – the latter being more and more substituted by smartphones. All in all, current market dynamics can be described best by ’trading up’, which makes the outlook for 2013 quite encouraging.
Office Equipment and Consumables: Market under pressure
Total sales of the Western European Office Equipment and Consumables market amounted to €4.1 billion in the fourth quarter of 2012; this is a quarter on quarter decrease of 2.3 percent. The full year figures show a decline of 3 percent, with a value of €15.5 billion. Among all countries surveyed within the GfK TEMAX® Western Europe, Austria, Belgium, France and Sweden showed slight increases in growth.
Inkjet printing devices - products very much related to private consuming – lost market value growth and, in some cases, even with double digits. This trend is reinforced in some countries by reluctant purchasing behavior. Laser printers are doing slightly better but are also facing decreasing demand and shrinking growth rates. Multifunctional devices were at least able to partly keep sales level but are also becoming more and more under pressure. These developments in turn have negative effects on the accessory business. Consequently, demand for inkjet cartridge and laser toners is declining. However, announced innovations in the printing segment fuel hope for better development in 2013.
Consumer Electronics: High quality audio on demand
In 2012, Western European sales for consumer electronic products amounted to €37.9 billion, a decline of 10.4 percent compared to the previous year. Q4 2012 could not stop that trend and witnessed a sales volume of €11.3 billion, which is 12.1 percent down on the last three months of the previous year.
It became clear that TV has lost its top position among the most wanted digital products. Consumers in the digital world do not prefer a new Flat TV as a first priority investment. Most households already own a Flat TV, even more often a second or a third one. These might be substituted by larger screen or Smart TVs. Thus, in total the market volume will remain on a stable and high level but the market value is hit by permanent price erosion.
However, prospects for the audio-segment are positive as consumers show growing interest in true listening pleasure. Moreover, consumers have lots of audio titles stored on their smartphone or portable media player and they want to enjoy this content in their living room, in high quality. This in turn leads to growing demand for accessories like docking stations. So the actual trend in Consumer Electronics is leaning more towards audio than TV or Video.
GfK TEMAX® Western Europe: Stable development in difficult year
In retrospect, 2012 has to be valued as difficult year for Europe, with several countries still facing recession and uncertainty. Against this background the minimal sales growth of 0.2 percent to €190.7 billion between January and December is all in all a quite solid result for the European TCG market. However, there is a major divide between the different regions. While the southern and eastern parts of Europe are partly facing extreme high unemployment rates, consumers in the northern areas are doing comparatively well despite crises. The developments of the different countries, surveyed within the GfK TEMAX® Western Europe are respectively different. The fourth quarter of 2012 saw a plus in sales of 1 percent. During this period, technical consumer goods saw a total volume of €56.3 sold.
However, experts believe that the crisis may have reached its lowest point in autumn last year. Thus, there are still uncertainties and risks, but also cautious hope for improvement in Europe. In most countries economic expectations largely remained stable in 2012 or improved slightly, albeit at a low level in general. Provided that the crisis does not escalate again, cautious optimism for the TCG market in 2013 is appropriate.
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 390,000 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.
Stefan Schmidt, T +49 911 395-3108
Wolfgang Seubold, T +49 911 395-3570
GfK is one of the world’s largest research companies, with more than 12,000 experts working to discover new insights into the way people live, think and shop, in over 100 markets, every day. GfK is constantly innovating and using the latest technologies and the smartest methodologies to give its clients the clearest understanding of the most important people in the world: their customers. In 2011, GfK’s sales amounted to EUR 1.37 billion.
To find out more, visit www.gfk.com or follow GfK on Twitter: https://twitter.com/GfK_en
Responsible under press legislation
GfK SE, Corporate Communications
T: +49 911 395-2645