Polish technical consumer goods market slows down in the second quarter of 2009
GfK TEMAX® shows market’s drop
Warsaw, August 17, 2009 – In the second quarter of 2009, as in the first one, the market monitored by GfK TEMAX® index registered a weaker result (PLN 5.7 billion) than in the corresponding period in 2008, this time falling 11%. Consequently, the first half of 2009 is down 8% over the same period last year, reaching just under PLN 12 billion.
Only the small domestic appliances sector ended the second quarter and the entire first half of 2009 with positive growth compared to the previous year. Other sectors experienced significant drops in this period in comparison to the second quarter of 2008. Their levels varied from 2.6% for the Office Equipment and Consumables sector, up to 19.2% for the IT sector. This weak performance influenced the complete, hardly optimistic picture of the first half of 2009.
Sales development of technical consumer goods in Poland
Small domestic appliances sector outclasses others
In the second quarter of 2009, the small domestic appliances sector achieved a favourable financial result particularly in comparison to the other sectors. Though consumer demand has decreased, the value of the SDA sector grew by over 9% in comparison to Q2 2008. The reason for this was the significant price growth of SDA products that counterbalanced the downturn in terms of sales volume. This encouraging performance can be partly attributed to the relatively low prices of small domestic appliances compared to the other sectors. Therefore the increase in price by just a few percent, mainly reflecting exchange rate of the euro, was more easily accepted by the consumers and did not cause a significant slowdown in demand.
Hot beverages makers outperformed the market, particularly due to the good performance of capsules machines, introduced to the Polish market at the end of last year. Personal care devices recorded quite impressive results as well. In contrast, the results of the traditionally major categories such as vacuum cleaners, irons and kettles, were disappointing.
Weak April for the CE market
In the second quarter of 2009 the Consumer Electronics sector was visibly affected by economic slow-down. Sales (in value terms) were down by 9% compared to second quarter of the previous year. The biggest drops occurred in April, while May and June were only slightly weaker than the year before.
Declines in the second quarter of 2009 were observed in almost every product group, including the flat TV market, which has been the driving force of the sector’s growth so far. However, it has to be underlined that the drop in that category (1% versus Q2 2008) is mainly the effect of a high base. In previous years, both the European Football Championships and Olympics took place, contributing to a considerable increase in demand for TV-sets.
Cartridges outperformed other product groups in the office equipment and consumables sector
The Office Equipment and Consumables market declined by almost 3% compared to the second quarter of 2008. Cartridges preserved their position with a 9% rise, whilst the other remaining groups declined.
MDA is giving in to the crisis
The Second quarter of 2009 was also an unsuccessful period for the MDA sector as well, as the market declined by 8% compared to the second quarter of 2008.
In hindsight the start of the year was very good, as old stock at lower prices sold out. In the beginning of the second quarter prices went up, mainly due to the weaker Polish zloty. This price rise was announced by producers in December 2008. Though the biggest price increase recorded was of less than 6% for cooling and on average growth throughout the MDA sector was below 2%, this could have contributed to the slow down of sales for the sector.
It was the cooling sector which disappointed most in Q2 2009. The weather has a strong impact on the sales of this product group. A rainy start to the summer with low temperatures limited the usual, seasonal exchange of the old, unable to withstand the heat devices for the new ones.
The built-in segment has shown the best results. These type of appliances is mainly purchased by wealthier people who are less afraid of the word "crisis”. Unfortunately its good performance cannot compensate for the declining trend of the free standing sector.
End of the price erosion for the digital cameras market
The Photo sector (limited in GfK TEMAX® to the digital cameras category) has exhibited a very visible decline in sales value in the second quarter of 2009 compared to the second quarter of 2008. The sector dropped by 14% in value terms during this period. It is notable that this decline is no longer directly related to the price erosion of digital cameras.
The situation of digital cameras with interchangeable lenses and digital cameras with fixed lenses still looks different. Digital cameras with interchangeable lenses dropped by 28% in terms of value in second quarter of 2009, whereas the average price in this period increased to the level of the second quarter of 2008. The losses in this category were partly covered by the still growing, albeit not as dynamically as in previous periods, sales of digital cameras with interchangeable lenses. In the second quarter of 2009, digital cameras with interchangeable lenses recorded an increase in sales value by about 30% in comparison to the same period of the previous year. This increase reflects both the increase in volume sales and the increase of average price, by over 10% in this period.
Smartphones still on an ascending wave
The second quarter of 2009 brought a continuation of the decreasing trend in the telecom sector. The aggregated subsidized sales value of mobile phones, smartphones, fixed phones and facsimiles was PLN 303 million, a decline of 12% on the second quarter of 2008. Q2 2009 was also worse than Q1 2009 by 4%. The only product group to show growth was smartphones (i.e. mobile phones equipped with with an open operating system plus a touchscreen and/or QWERTY keyboard). Their sales value in the second quarter of 2009 was over 60% higher than the year before. However, the overall sales value of GSM devices (traditional mobile phones and smartphones) decreased by 10% in comparison with the second quarter of 2008. The decline deepened for fixed phone devices and facsimiles as sales in value terms in Q2 2009 dropped by 16% and 41% respectively.
Booming netbooks
The current IT market situation has not been so bad since a very long time. Mobile computers, decreasing by only 5% are merely the tip of the iceberg. Other groups decreased by around 30% or more.
Positive trends remain with netbooks. Unit share of these small and cheap computers surpassed the 10% barrier of the mobile computers total. The popularity of these devices has been apparent for some time, but still seems to possess considerable potential.
Weak market results in the second quarter 2009
The results of the second quarter of 2009 seem to confirm the assumption of the market slowdown related to the macro-economic situation and the symptoms of the crisis. In this quarter the falls in market value are not reflecting the price decreases, as prices rose in most of the sectors, but are instead a result of the diminishing sales in volume terms, which may indicate a decline in consumer demand. At the same time in several market sectors, the categories best resisting the shrinking demand are the most expensive ones – flat TV-sets that practically maintained the sales level from a very strong second quarter in 2008, built-in equipment, more expensive than the free-standing, grows, as do digital cameras with interchangeable lenses.
In the coming months the macro-economic situation will determine the market development. As long as news of a subsiding crisis or the Polish zloty strengthening continue to appear, we should be able to count on a better performance from the Polish technical goods market.
Summary in table format
GfK TEMAX® Polska 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
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