Overall technology and durable products are declining by 4 per cent in the region
Singapore – July 13, 2022 – GfK’s 2022 Outlook: The State of Consumer Technology and Durables Report also indicates that health, wellness and hygiene products are top of mind globally, with 49 per cent of consumers actively purchasing such products and services that help them live a healthy lifestyle.
During the pandemic in the past two years, consumers had resorted to purchasing technology and durable (T&D) products to provide solutions, experienced a boom in the sector in 2020-21 period. However, the current macroeconomic factors / geopolitical situation have pulled down the momentum in 2022. Following factors are impacting market growths:
- Global and local supply chain disruption, increase in energy prices – intensifies due to Ukraine – Russia war
- Supply constraints, production shutdown due to extended lockdown of China market and delayed logistics are leading to price hikes of commodities which will impact demand
- Increase of interest rates by central banks of large economies to contain inflation is leading to increase in working capital expenditure.
Continued situation of remote and hybrid work structures renewing interest in health, wellbeing, cleanliness and premiumisation
Fig. 1 Growth rate (%) by sales value of T&D, sub-sectors and selected product groups between January – May 2022 vs. same period in 2021.
In January-May 2022, T&D sector recorded sales of US$179 billion (down by -4 per cent) in APAC. However, the premium brands continue to contribute a quarter of the market value.
The 2020 pandemic and hybrid working culture that accompanied it had intensified consumers’ acceptance of premium products, opting for high-end manufacturers known for quality and smart design. This trend started off during the pandemic in 2020 and continues till date, initially led by increased disposable income across consumer profiles but currently in 2022, it is driven by consumers who are less affected by increased prices / inflation. This trend is being observed via premium brands with a sales value 50 per cent above market average (150 index points) – stable performance and accounting for 23 per cent of T&D sales regionally.
In the hybrid work situation, people are still projected to spend on T&D products that address their needs for health, well-being, entertainment and convenience.
As witnessed, products like core wearables and gaming mice sales continue to both grow at 16 per cent over 2021. Similarly, sales of IT products have continued to grow strongly – recording a 6.9 per cent growth rate in January-May 2022 compared to January-May 2021.
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