Although inflationary pressures and rising costs hit record high in 2022, despite market volatility, Asia’s relative stability offers opportunities
The Asia Pacific market for Technical Consumer Goods faced some challenges in 2022 owing to the impact of global economic situation, with inflation topping the list. With a number of issues continuing to weigh on economies and impact consumers, GfK forecasts 2023 to be a stable year backed by value seeking consumers driving revenue growth.
Facing various challenges in 2023, the brands and manufacturers need to consider the criticality of inventory management and pricing pressure. To achieve competitive advantage, brands need agility in production cycles and innovation in product offering and marketing. This will lead to the conception of smart devices and premiumization product offerings.
“India and Southeast Asian markets, particularly Malaysia, Indonesia, and Vietnam, continue to demonstrate opportunities with stronger growth, continuing the momentum from loosening lockdown restrictions. Additionally, overall sales of TCG goods are declining across most regions except for Emerging Asia recording year-on-year growth for five consecutive quarters.” said Mukund Tripathi, Head of Market Intelligence, APAC, GfK.
Rise in sales of photo and gaming products
Sales of photo products grew alongside the post-pandemic tourism recovery due to the reduction in Covid-19 travel restrictions, especially in Singapore and Malaysia at 33.1 per cent and 32.8 per cent respectively.
The gaming industry was also amongst the biggest beneficiaries during the pandemic, with lockdowns creating new gamers and expected to accelerate hardware expenditure and growth in 2023. Southeast Asia displays strong growth as a good potential market despite weathering the pandemic, experiencing the highest growth rate at 51 per cent in 2021 and 12 per cent in 2022 compared to other regions in Asia Pacific.
Online sales continue to gain significance post-pandemic
TCG goods sales keep growing across all sectors in Emerging Asia, with online channels outperforming offline ones for IT products and office equipment. In Japan, online sales rose for most sectors except for Major Domestic Appliances, while offline sales fell.
Sustainability is a priority among consumers
Sustainability is a key trend in the TCG sector that sets brands and manufacturers apart. Communicating sustainability actions is essential to connect with environmentally minded consumers. This was also highlighted at the GfK Insight Summit 2022, where consumers’ monetary concerns influence their buying attitudes. This means that brands can charge more for being green.
Brands and manufacturers can benefit from more opportunities and favorable external forces in 2023. A tourism recovery in the post-pandemic world, a decrease in transportation and shipping costs, and the opening of the Chinese economy will enable growth with product innovation and differentiation that yield higher profits.
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