The value of the global Technical Consumer Goods (TCG) market, excluding North America, grew by a record 26 percent to 433 billion US dollars in the first half of 2021 versus the same period last year. GfK expects a moderation in growth for the second half of 2021 due to comparison against peak sales achieved in the second half of 2020. For the full year 2021, GfK expects sales of 1.4 trillion dollars for the total TCG market, including North America, which represents an increase of +12 percent. This marks a new high in global sales value. Staying at home continues to be the core driver of this growth; due to tech-led solutions for continuity of work, education, entertainment, and cooking at home.
Globally, the demand for TCG goods in the first six months of 2021 was phenomenal as markets continued to adapt to social distancing measures instituted due to the pandemic. IT and home appliances continued to be popular in the first six months of 2021 as the tailwinds of growth from 2020 continued. The IT and Small Domestic Appliances (SDA) sectors even exceeded sales in comparison to the pre-COVID period of 2019: +27 percent for IT and +25 percent for SDA. Other sectors also returned to growth during the first six months: The Consumer Electronics (+18 percent), Telecom (+30 percent), and Major Domestic Appliances (MDA) (+26 percent) sectors bounced back and grew versus the first half year of 2020.
However, the varied infection rates, restrictions, and different paces of vaccination are causing differing levels of growth across the world. Smartphones, which saw double-digit declines in 2020 in Emerging Asia and China, are witnessing +29 percent and +33 percent value growth respectively. In the case of total TCG, regions like Europe (+24 percent) and China (+32 percent) are reaching new levels of demand and Emerging Asian countries are registering strong growth versus the 2020 lockdowns.
According to GfK’s Consumer Insights Engine, 17 percent of survey respondents are continuing to purchase TCG products sooner than planned. This is due to demand being pulled forward to satisfy urgent needs, or it could be due to anticipation of shortages and price increases. The heightened demand in the market is also causing price increases.
Nevin Francis, GfK expert for the TCG industry, explains: “With market intelligence data across a huge range of tech and durables categories, we are seeing an average price increase of +26 percent across TCG products in the first six months of 2021. This trend began in the third quarter of 2020. For some categories it is driven by high demand coupled with raw material shortages and supply chain bottlenecks, whereas in certain other categories it is due to certain portion of consumers switching to premium segments, driven by the need for long-lasting products from brands they trust. This aligns with GfK Consumer Life studies from 2020, where 48 percent of respondents affirm that they buy products and services from trusted brands. The changes in the channel of purchase also add to this premiumization effect. Timely awareness of such trends helps our clients to know and act at the right junctures.”
The TCG market growth accelerated by the at-home experience
Aside from the urgent need for certain products while at home, consumers wanted performance, simplification, premiumization, borderless shopping and health & hygiene. GfK is witnessing varied manifestations of these trends in each sector.
Mobile PCs, a crucial all-in-one equipment for virtual working and learning, were a hot seller in regions more greatly affected by the pandemic. They witnessed a +64 percent turnover increase in Latin America and +50 percent in South East Asia (including India) in 1HY 2021. High performance and premium segments like Gaming Keyboards grew by +30 percent in the first half of 2021. Similarly, from an entertainment perspective, larger displays and premium devices that come with high performance equipment are key growth drivers. GfK data shows that TVs with screens larger than 60 inches recorded sales of 11.3 billion dollars (+46 percent) in the first half of 2021. New technologies such as GPU Sync, which provides better synchronization with game consoles, have already achieved a market share of 18 percent for devices over 50 inches. The advancing trend towards premium devices is also causing prices to rise. A TV set cost around $429 dollars in the first half of 2020 and now $536 dollars in the first half of 2021.
As many companies are deciding on flexible work-from-home models even post pandemic, there will be more meals to cook, more storage required and more cleaning at home. When it comes to storage, food preparation, and cleaning activities, consumers value high capacity as well as quality and premium priced products. For example, high-capacity side-by-side refrigerators (+36 percent) and those with more than four doors (+33 percent) were very popular in the first half of 2021. And products that promise improved hygiene also showed potential. Washing machines with the steam function sold almost twice as much as in the previous year.
According to GfK´s Consumer Life study, more than half (53 percent) of consumers worldwide agree with the statement, “I am always looking for ways to simplify my life.”. Products like Kitchen Machines and Food Processors that make cooking easier continued their strong growth run. Similarly, Robot Vacuum Cleaners grew by a strong +47 percent, replacing cylinder vacuum cleaners as the second largest vacuum cleaner segment for the first time. Cordless handstick vacuum cleaners continued to grow, at +18 percent in the first six months of 2021.
Sustained online growth?
Online sales peaked to unprecedented high numbers in 2020. But as vaccinations proceed and restrictions ease, GfK is seeing traditional retail return to growth. However, online sales continued the strong growth run from 2020: The share of online sales grew further, by +32 percent, reaching 35 percent share in the first half year of 2021. For selected sectors like IT and SDA, this share was even as high as 50 percent.
Nevin Francis adds, “This trend has been particularly true for select categories that have tended to be more convenient to sell online, even pre-pandemic. However, the pandemic has fast-tracked the adoption of online purchasing and changed notions; certain consumers have overcome their reservations to purchasing online. The big winners in this transition have been the online shops of traditional retailers. This may have been driven by the combination of convenience and immediate gratification, which traditional retailers’ online shops offer. As a result, they witnessed a three-digit growth rate of +152 percent compared to 2019 across Europe. Models such as livestreaming and social commerce could be the next iterations of this development in retail.”
That said, retailers and brands will have to be prepared for the fact that demand will be more moderate in the second half of the year if pandemic-related restrictions are relaxed. Vacation and other leisure activities would potentially take up a larger share of the household budget.
Notes to editors
GfK regularly collects sales data in more than 70 countries worldwide for consumer electronics, photo, telecommunications, information technology, office equipment, and major and small domestic appliance segments through its retail panels. All figures are assuming a fixed euro exchange rate.
Unless otherwise stated, all figures mentioned in this press release refer to the period from January to June 2021. Growth rates in percent refer to sales compared to the corresponding period of the previous year. All sales and growth figures are calculated in dollars.
Press contact: Julia Richter, T +49 911 395 4440, firstname.lastname@example.org
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