GfK TEMAX® Romania for the second quarter of 2010
The TCG market sees the decline decelerate
Results of GfK TEMAX® Romania for the second quarter of 2010
Bucharest, August 16 2010 – The decline of the Romanian technical consumer goods market decelerated in the second quarter of 2010, decreasing by 15% compared with the same period last year. However, it should be noted that the overall value is less than in the first quarter and with the VAT increase active as of 1st July, the negative trend may be set to continue.
The overall market for technical consumer goods monitored by GfK TEMAX was EUR 266 million in the second quarter of this year, down 15% from the EUR 313 million in the same quarter of 2009. Sectors such as consumer electronics, photo and small domestic appliances reached values similar to Q2 2009, while IT and Telecom dropped by more than 20%.
Consumer electronics: World Cup and news on TVA increase boost TV sales
When comparing with the same period of the previous year, the consumer electronics sector increased slightly (+1.3%) in the second quarter of 2010, achieving sales of EUR 55 Million.
While for products such as Panel TV and video games consoles high consumer demand translated into positive growth rates, for the rest of the consumer electronics market, growth remained negative.
Seasonal products such as camcorders and portable navigation devices are not performing at their best; the consumer is looking for models which are price attractive. For example, in the camcorder market one in every two camcorders sold in June 2010 is recording on a Chip/Flash Memory at standard resolution; whereas the sales of Car Navigation devices with no map included increased in the last three months. All these are examples of products positioned on a price appealing segment for the consumer.
The FIFA World Cup effect brought a double-digit increase for TV sales in June 2010 when compared with June 2009. However the impact of this event was far less strong than that of the UEFA European Football Championship in June 2008. Another factor contributing to the sales boost on the TV market in the last weeks of June 2010 was the news of the VAT increase and the associated promotions made by retailers.
Photo: Summer season sales starts with compacts
Supported by seasonal factors, the photographic market managed to maintain a stable turnover of EUR 9 Million, the same value this market consistently achieved in the last three quarters of 2009.
In contrast to Q4 2009, when Christmas sales were sustained by Image Displays solid performance combined with a rise in sales of D-SLR, the second quarter of 2010 marking the beginning of summer sales brought a recovery of the compact segment. June 2010 was the first month of growth year on year for this segment, as sales went up with little more than 10% versus June 2009. However, no additional value was created on the market as this rise in volume was associated with price erosion for the main segments with zoom <3x and 3x<4x.
Small domestic appliances - Romanian Female Depilation Market starts growing:
After several quarters of decline, the Romanian SDA market continues on a descending trend in the second quarter of the year, albeit with a smaller drop (-1,7%) compared with the same quarter of the previous year. The recovery of the market comes from a range of product groups which have started to increase some time ago such as Food Preparation, Kettles, Hairclippers and also from new increasing categories such as Hot Beverage Makers and Shavers. During this quarter, May was the month with the highest values among many categories, with the exception of Food Preparation and Vacuum Cleaners - their best month was April - and Shavers, which had a better evolution in June. The ascension of the Hairclippers, Men’s shavers and Espresso machines markets and the seasonality of Epilators helped to trigger sales of the entire sector. Within the Espresso machine market, Espresso Pump Closed and Espresso Pump Open are the increasing sub-segments, which together with the increasing sub-products from the Food Preparation market such as Hand mixers, Hand blenders, Choppers and Liquidizers, support the idea of domestic spending.
Despite a better picture for these categories, the threat of recession and the low level of consumer confidence may have kept people away from big purchases. We must take into account the drop of some important products such as Vacuum Cleaners and Irons.
In many segments, sales are driven by a variety of price promotions, still the key determinant for purchase.
Major domestic appliances: Striving for growth
With sales of EUR 70 Million in the second quarter of 2010, the market for Major Household Appliances was 13.6% below the performance reached in Q2 2009. However, sales in Q2 2010 were above those achieved in Q1 2010 due to seasonal factors boosting sales of cooling products (refrigerators and freezers). Another factor contributing to the uplift in sales was the VAT increase effect which shaped public opinion and created positive demand for these products and others besides. Further positive developments for the major domestical appliances market highlight an increase of the average price for these products in the first half of the year, which in return indicate the consumer preference towards better featured and higher quality products.
IT: the decrease is slowing down
The Information Technology sector declined in the second quarter of this year in comparison to the corresponding period of last year by -20.5%, equal to a value of EUR 69 million. On the other hand the decline slowed down compared to the first quarter of 2010, when the decrease rate was -38.2%. Although notebooks are the best performing category of the IT sector, they did not avoid a negative performance in sales value for the overall sector. Due to the crisis, consumer confidence is still very low, which leads many to postpone important acquisitions.
Telecom: smartphones, increase in volume.
The second quarter of 2010 brought a decrease in the telecom hardware market value (mobile phones and smart phones) of -28.5% in comparison to the corresponding period of last year, reaching a value worth EUR 39 million. Smartphones outperformed the market and were the only product group to increase sales in volume terms. However the overall drop in average price for mobile phones and smart phones led to a decrease in value. The reason for this is on the one hand a fall in average price of high end models, especially products with touchscreen. In addition, the decrease in average price affected by the increase in sales of low end models with basic functions offered for low prices, or even for free.
Office equipment: consumer and corporate demand affected by the crisis
The status of the Office Equipment (OE) market is similar, being directly related to the IT market. The office equipment sector recorded a decrease of -28.9% in the second quarter of the year compared with the same period of 2009, reaching value equal to EUR 7 million.
The lack of public projects and the current economic context had a negative impact on the printing market. The market evolution depends very much on corporate consumer attitude. If large companies continue not to invest in new technology solutions which could reduce costs on the long term and the private consumer will not be encouraged to purchase, it will be more difficult to alter this tendency. If on the other hand the consumer is motivated to buy and investment is made in the public sector, the OE market, including printing and MFD products, has a good chance of recovery.
The survey
GfK TEMAX® Romania is an index developed by GfK Retail and Technology to track the technical consumer goods markets. The GfK TEMAX® Report is published internationally. The findings are based on surveys carried out by the retail panel of GfK Retail and Technology. The retail panel comprises data from over 190.000 retailer outlets worldwide. All reports and press releases are also available at www.gfktemax.com
The GfK Group
The GfK Group is the No. 4 market research organization worldwide. Its activities cover the three business sectors of Custom Research, Retail and Technology and Media. The Group has 115 companies covering over 100 countries. Of around 10,000 employees, over 80% are based outside Germany. For further information, visit our website: www.gfk.com.
