Singapore's consumer tech and durables industry proves to be resilient amidst economic headwinds as it shows gradual improvement in retail sales comparing between first two quarters of the year. There are also bright spots in specific sectors bringing in growth. Mukund Tripathi, a Tech & Durables Expert, shares insights on the current state and prospects of the tech and durables market in Singapore.
In the first half of 2023, Singapore's tech and durables market experienced a 3 percent decline in unit sales and flat movement for total market USD value. Drilling down between quarters, the second quarter managed to bring in a more positive result of 3% growth in total market USD Value against the same quarter of last year with events such as the Great Singapore Sale gaining retail sales momentum. This is against the backdrop of a 5 percent decline in the first quarter 2023 compared to the same quarter last year.
This gradual improvement is expected to continue into the second half of the year with expectations high for peak season sales events during holiday periods such as Christmas and Deepavali. These events are anticipated to feature discounts driven by consumers strategically timing their purchases and retailers seeking to clear higher-than-average levels of old stock.
Resilient Sectors in Singapore's Market:
Certain sectors have proved to be more resilient than others. Industries that are faring well include those that were disrupted during the pandemic years such as Travel-related industries, including cameras, and small domestic appliances. While an inverse relationship is seen in industries that faired well during the pandemic such as the Information technology sector, although sales are still well above pre-pandemic levels.
Notable performance variations in key subsegments during H1 2023 vs. 2022 include (in Value USD Terms):
Consumer Electronics (TVs, soundbars, etc.): -2 percent
Telecom (Smartphones, etc.): -1 percent
IT (Mobile PCs, hardware, etc.): -8 percent
Small Domestic Appliances (Fryers, mixers, etc.): +17 percent
Major Domestic Appliances (ACs, ovens, etc.): +5 percent
Photo Appliances (Camera, Camcorder, etc.): +1 percent
Retail Landscape Transformation in Singapore:
Online sales continued to grow post-pandemic in Singapore, indicating a continued shift toward e-commerce and shoppers becoming increasingly comfortable purchasing goods online. In the first half of 2023, online sales grew +10% while traditional sales declined.
Apart from the added convenience of shopping online, the retail ecosystem in Singapore provides an opportunity for further online growth. These include support for multiple payment options, omnichannel retail developments, attractive online-only promotions by e-commerce giants, and efficient logistics and delivery.
Convenience and affordable premiumization in Singapore.
Products offering features that offer greater convenience registered strong growth. For instance, sales of robot vacuum cleaners surged by 35% in Singapore during H1 2023, faster than the growth of overall vacuum cleaners of 9%. This is like washing machines where products with automatic dispensers grew by 60%, at a much faster rate than overall washing machines which only registered 9% value growth.
While the demand for premiumization is not as strong this year compared to 2022, high-end models within affordable premium price bands continue to outperform the market average, for example, while the overall Singaporean TV market is down 3 percent in the first half of 2023 compared to the same period last year, the sales volume of premium TVs over 75 inches increased by 23 percent. In Refrigerators, the sector declined 2 percent while those with Smart Application and Voice Control grew 5 percent.
Strategic Purchases and Promotions in Singapore:
According to Mukund Tripathi, APAC Head of Market Intelligence for Tech & Durables, GfK, “In light of the ongoing cost-of-living challenges, consumers in Singapore are exercising discretion when making purchases. Price remains a crucial factor, with consumers prioritizing affordability and value.”
Promotions have become a compelling factor in Singapore's market, with events like the Great Singapore Sale and holiday discounts resonating with consumers looking for attractive price points. In the e-commerce sphere, “double day” promotions such as 10.10, 11.11 etc have pushed consumers online with attractive price cuts and bundling promoted through various mechanisms such as coupons, live events, and games.
These promotions are anticipated to play a crucial role in fueling value growth within Singapore's tech and durables market in the second half of 2023.
Seizing Opportunities in Singapore:
Singapore's tech and durables market remains a landscape ripe with opportunities for growth. Sectors aligned with sustainability and convenience show consistent resilience and continue to attract consumer interest. As the market evolves to meet changing consumer preferences and dynamics, industry players are encouraged to be proactive and flexible. Understanding the intricacies of Singapore's market and aligning strategies accordingly will be crucial to unlock its full potential in this dynamic and evolving marketplace.
Seizing the APAC Opportunity
According to GfK Global Consumer Life Study 2023, Consumers’ personal economic confidence is always much higher in emerging markets, and it has rebounded in the last two years. In contrast, confidence continues to drop in developed markets.
In conclusion, despite the challenges faced by the APAC tech and durables market, it remains a landscape ripe with opportunities for growth. Sectors aligned with sustainability and convenience show consistent resilience and continue to attract consumer interest. As the region evolves and adapts to changing consumer preferences and market dynamics, industry players are encouraged to be proactive and flexible. Understanding the intricacies of the APAC market and aligning strategies accordingly will be crucial to unlock the full potential of this dynamic and evolving marketplace.
About the method
Through its retail panels, GfK regularly collects POS data in more than 70 countries worldwide for the consumer electronics, photography, telecommunications, information technology, office equipment, and small and large household appliances sectors. All figures are according to GfK panel market, with global data excluding North America and presented in US dollars, except stated otherwise.
Through its distribution panel, GfK regularly collects sales data in more than 40 countries worldwide for products in the consumer electronics, photo, telecommunications, information technology, office equipment segments from around 300 distributors / wholesalers. B2C refers to the business to consumer channels of distributors.
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GfK Consumer Life Study
GfK Consumer Life is the most comprehensive and longest-standing consumer trend study in the world. Its data has been collected annually since 1997 from over 30,000 consumers in more than 29 countries, providing market leaders with detailed information about all aspects of people’s lives, including their aspirations, personal values, future world outlook and concerns, lifestyle behaviors, and much more.
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