NEWS INNOVATION
NEWS INNOVATION CONTINUES TO BE THE DRIVER OF BUSINESS. Hans-Joachim Kamp Chairman of the Supervisory Board, gfu Consumer & Home Electronics Analysis The Global Market for Technical Consumer Goods Global turnover of consumer electronic products and the digital world in general saw increasing figures for 2017 at €836 bn, a rise of more than 3% compared to 2016. At the recent IFA Global Press Conference in Rome, Hans-Joachim Kamp, Supervisory Board Chairman – gfu Consumer & Home Electronics (the German industry association) stated that for 2018, a growth of almost 4% was forecast. Three major regions – Europe, North America and China, account for close to 70% of the consumer electronics revenue. Looking to the future, Latin America leads current growth with forecast +9% this year, followed by emerging Asia, with China, and in thirdplace, Europe. PRODUCT SWEET SPOTS Three categories: smartphones, mobile PCs and TVs, account for close to 3/4 of the turnover for consumer electronic products. One must keep in mind with this however, that the figure for smartphone sales is based on real prices. In fact, consumers are paying less for the devices, due to discounts from the mobile phone providers. The different product groups have developed differently in the past years. Sales for smartphones increased 4% from 2016 to 2017. This year, gfu expects a growth of more than 3% up to 1,527 million units. PC sales, with an estimated 283 million units, should show a drop of 4% from 2017 to 2018, which is a smaller decrease than in the year before, which was nearly 7% down. For TVs, gfu expects an increase of 6% in 2018, up to 236 million units. That’s one of the highest growth rates of recent years. TECHNICAL TRENDS There is very little change to last year, in that innovation continues to be the driver of business. The smartphone segment is an ongoing battlefield of innovation, with, for example, new cameras with highly increased performance, brighter and bigger displays, face recognition, faster processors and much more. Another reason for the success is that smartphones continue to be lifestyle products that people replace frequently, often within two years or less. PCs offer more compact bodies - often the so-called “convertibles”. Furthermore, they have increased computing and battery performance. Nevertheless, smartphones are more and more replacing PC use-cases. Take social media for example. For the TV segment, gfu forecasts that customers will continue to buy bigger TV sets with more high-performance features. TV features such as better picture quality due to higher dynamic range and higher frame rate and of course 8K resolution, with, in addition, new designs like wallpaper TV and flexible displays offering a lot of new possibilities in using and placing the TVs, not only in the consumer market, but also in B2B solutions. The success of the TV market has two more reasons. There are high replacement rates for older TVs like the first generation of flat TVs or the old CRT sets. Besides that, more and more households want to own a second or third TV. REGIONAL BREAKDOWN The ranking of turnover for smartphones shows China as number one with a share of 30% or nearly 2 times as many units sold as in emerging Asia, Europe and North America, with 16%, 15% and 14%. Looking at PC sales, North America is leading with 29% of sales. Europe is in number two position with 23%, and China ranks number three. For TVs, China, North America and Europe are showing mostly the same percentage and ranking from place number 1 to 3. THE TV MARKET Sales of Ultra HD TVs are growing continuously. For 2018, gfu expects nearly 100,000,000 UHD TV sets sold. This means a turnover of around €68bn and a growth of 38% in units, or 35% in value. This growth is far bigger than the year before. More than 40% of all TVs sold in 2018 will be Ultra HD TV sets. UHD TV sets are very popular in the Asia-Pacific region, where about 46% of UHD TV sets were sold, followed by North America with 21% and Europe with 20%. INNOVATION DRIVES TV MARKET 66% of TV sales in 2017 were based on new TV models. One major trend in general is voice control, however it is difficult to get reliable figures in this field. 10
NEWS The first problem for market researchers is the fact that the main players are not classic manufacturers as we know, and secondly a large number of sales are online and neither the sales organisations nor online shops share the results with market research organisations. Nevertheless, gfu has attempted to make a forecast. After major growth last year with more than 300%, the success continues this year. Another growing segment is wearables. After more than 160 million units sold in 2017, the forecast of sales in 2018 will be 211 million units. gfu’s expectation for this year is the growth of 32% in units and 35% in value. WEARABLES BY REGION The biggest markets for wearables are China and North America. Only 17% of wearables are sold in Europe. That’s significantly less than Europe’s 20% share of the global market of consumer electronic products. This means that wearables do not perform as strongly as TV sets do in Europe. With 10% of global wearable sales, Developed Asia is matching its global CE products sales share. In Emerging Asia, Latin America, and Middle East & Africa, there is much room for improvement. GFU EXPECTS POSITIVE MARKET DEVELOPMENT IN 2018 WITH 4% GROWTH OVERALL. SUMMARY gfu expects positive market development in 2018 with 4% growth overall. Smartphones and TV sales will continue to show increasing figures. Innovation continues to be the key driver of all markets, and last but not least, IFA is always at the edge of markets and technology development: THE place to be! “BRICKS & MORTAR” RETAIL IN EUROPE TO GROW BY 2.1% IN 2018 GfK anticipates a 2018 nominal turnover growth of +2.1% for stationary retail in the 28 EU member states. But trends within the individual countries under review vary widely. While real-value growth is expected for countries such as France, Spain and Hungary, countries with low growth rates will come out less favourably due to slightly rising inflation. These are some of the insights from GfK’s newly published free study on European retail in 2018. The European economy faces major changes due to Brexit in addition to various economic and political challenges. Uncertainty about future trade conditions with the USA is raising concerns about the potential impact on European exports. As in previous years, GfK’s Geomarketing solution area explored the current and anticipated retail situation in Europe through a comprehensive analysis of key retail indicators. Featuring trend analyses for 32 European countries and a turnover prognosis for 2018, GfK’s study “European Retail in 2018” provides important orientation for retailers, investors and project developers. “All European countries were able to benefit from economic growth in 2017,” explains Dr. Johannes Schamel, study lead and GfK retail expert. “On the whole, we anticipate continued growth in 2018 for Europe’s brick-andmortar retail, although turnover growth and price increases will cancel each other out in some countries.” Purchasing power: In 2017, each citizen of the EU-28 countries had an average purchasing power of €16,436. This equates to a nominal increase of 1.9% compared to the previous year. Among the EU countries, only Great Britain (-1.5%) underwent a purchasing power decline, which is partly a result of the devaluation of the British pound. Great Britain aside, the momentum from previous years continued, with aboveaverage growth rates particularly in central and eastern European countries. Turnover prognosis for 2018: The past year’s growth in demand was able to compensate for stationary retail’s market share losses to online trade. For 2018, GfK expects nominal turnover growth of +2.1% in the 28 EU countries. But this is just slightly below the forecasted inflation rate, meaning that only modest real-value growth is anticipated for retail turnover in Europe. Thanks to continuing income increases, the topranking eastern European countries of the previous years once again lead the pack in 2018. GfK expects robust growth rates for Bulgaria (+5.3%), Hungary (+6.0%), the Czech Republic (+6.5%) and Romania (+7.5%). CONSUMER ELECTRONICS PRODUCTS Sales by regions 2017 Europe 15 % North America China Dev. Asia Emerg. Asia w.o. China Latam Middle East & Africa SALES VOICE CONTROL Valuation 2016 11 m units 14 % 30 % 5 % 16 % 8 % 12 % Smartphones 468 2017 45 m units + 309% 2018 Source: GfK > 150 m units 23 % 29 % 18 % 9 % 7 % 5 % 10 % PCs 117 Sales area provision: In 2017, there was an increase in the absolute retail space in the European countries under review. The only exception were the Netherlands at -0.4%. But a different picture emerges at the per capita level: In half of the studied countries, per capita sales area remained constant or even declined. Per capita values for this indicator range widely across Europe. For example, inhabitants of the Benelux countries (1.48 -1.64m²) have more than twice the retail shopping space available to inhabitants of Romania (0.72m²). 21 % 22 % 20 % 5 % 13 % 11 % 8 % TV sets 107 bn US$ + > 230% www.ifa-international.org IFA International • Monday 27 th August 2018 11
