Disturbing news for the Polish market of domestic durables in the third quarter of 2009
The findings of GfK TEMAX® for the third quarter of 2009 indicate weaker trends
Warsaw, 16 November 2009 – the market of domestic durables in the categories included in the TEMAXâ index amounted to nearly PLN 6 billion in the third quarter of 2009. The result fell by 12 per cent in comparison to the third quarter of 2008.
This time, the disturbing fact is that declines were recorded by all the monitored sectors although their level varies considerably – from below 2 per cent in large domestic appliances to over 20 per cent in the IT sector. The weak result in the third quarter has had some impact on the results since the beginning of the year. The total result of the first three quarters of 2009 is 10 per cent lower in comparison to the same period lat year.
The Polish market of domestic durables
mld PLN - in PLN billion
Kw - Q
Encouraging results in the major domestic appliances sector despite a minor decline
The declines on the major domestic appliances market slowed down slightly in the third quarter. The market value dropped inconsiderably by mere 2 per cent in comparison to the third quarter of 2008. The declines per item are still significant, but to a large degree they were neutralised by the increase in the mean prices. The 2 per cent drop in the market value should be regarded as a good result, especially when compared with the other sectors.
When dividing the market of major domestic appliances into built-in and freestanding, we can observe a dynamic growth trend in the former and a slowdown in the latter. Washing machines and refrigerators have the largest share in the decline as their value constitutes about half of the whole major domestic appliances market. Among the major domestic appliances, it is necessary to highlight built-in and freestanding dishwashers, whose sales have grown systematically for a number of years.
Similarly to the previous years, the last quarter will be decisive for the results considering the highest sales in that period. Closing the year with an equally good result as in 2008 is already unlikely. Even if the last quarter is weak, the market value decline will not exceed 5 to 7 per cent for the whole year. In comparison to other European countries and in comparison to 2008 (the best year in history), such a result will be satisfactory.
Worrisome sales results in the traditional categories of small domestic appliances
Following the good financial results in the second quarter, the result of the small domestic appliances sector is below expectations. Despite the significant growth in prices, the sales value fell by 2 per cent in comparison to the previous year. The most considerable drop in sales was recorded in September, which is not a good symptom considering the forthcoming Christmas period, which is the most important for the small domestic appliances market. In the traditional categories such as vacuum cleaners or eclectic kettles, where we observe high market saturation, the sales value has fallen by 5-7 per cent. This problem does not concern only hand blenders, hair styling appliances and coffee machines. The last product group still records results that are considerably above average and maintains a two-digit growth rate.
Cartridges as the only growing sector on the market of office equipment and consumables
The decline on the market of office equipment and consumables also oscillated around 2 per cent. Notably, cartridges are the only product group that recorded growth in this sector again. The second best group are multifunction machines, whose decline did not exceed 10 per cent. Unfortunately the office equipment market is the last sector to record inconsiderable declines. The other sectors, including the consumer electronics sector, have recorded two-digit drops.
Declining sales of flat-screen TVs
The third quarter of 2009 is yet another period of falling sales on the consumer electronics market. Unfortunately, the downward trend has reached -13 per cent. The main reason is the deteriorating situation on the market of flat-screen TVs (dominating in the sector’s sales structure), which have fairly effectively avoided serious declines until now. The rest of the market sill recorded a negative result in comparison to the previous year, but the trend dynamics remains stable.
Everyone in the industry is looking forward to the most important period of the year in terms of the sales of consumer electronics. This time the sales will certainly be high, but whether the pre-Christmas period will be as successful as last year remains to be seen. Unfortunately, the signals from the market are not very optimistic.
Stable demand on the market of GSM appliances; lower mean prices as the reason for declining market value
In the third quarter of 2009, the total sales value in the telecommunications sector (mobile phones, smartphones, landline phones and fax machines) amounted to PLN 306 million, which is 16 per cent lower in comparison to the same period last year. At the same time, in comparison to the previous quarter, there was a slight 1 per cent growth. The situation on the GSM appliances market (traditional mobile phones and smartphones) is developing interestingly. The sales value fell by 16 per cent in comparison to the previous year, but the sales per item remained on more or less the same level. This stems from considerably lower mean prices of handsets. Similarly to the previous periods, the smartphone segment recorded a high growth in the third quarter although the growth dynamics slowed down. Among the landline appliances, the sales value has fallen by 13 per cent for landline phones and 30 per cent for fax machines, but there was considerable growth in comparison to the second quarter of 2009.
Significant growth in digital camera prices
A negative result was also recorded in the photo market (limited only to digital cameras in the GfK TEMAX® index). This was yet another quarter of declining sales value in comparison to the same period last year. The sector’s value in the third quarter of 2009 fell by 17 per cent in comparison to the third quarter of 2008.
The situation in cameras with fixed and replaceable optics varies only in terms of the sales value. The cameras with fixed optics faced a slightly higher decline of 29 per cent in the third quarter of 2009, with the average price growth of 15 per cent in comparison to the third quarter of 2008. The losses in this category were partially neutralised by the continually growing sales of cameras with replaceable optics. In the third quarter of 2009, their sales value grew by only 14 per cent in comparison to the third quarter of 2008, which resulted from increasing mean prices (+35 per cent) and falling sales per item in this period.
Notebooks – the only growing category in the IT sector
The situation on the IT market is even worse than in the previously discussed sectors. In comparison to the third quarter of 2008, the sales value fell by 20 per cent. The downward trend is observed in all the product categories. The least serious declines were faced by mobile computers, which lost "only” 10 per cent in comparison to the same period last year. The only group to record growth in the IT sector were notebooks.
The forecasts for this sector do not look very optimistic, either. The key categories continue to face falling sales values, and the trend is gaining strength. It has to be noted that, to a high degree, this market is dependent on orders from public firms and institutions. While some experts forecast investment growth in companies at the turn of the year, no improvement can be anticipated in public procurements. On balance, this market cannot be expected to recover any time soon.
In anticipation of the fourth quarter
The findings for the third quarter of 2009 are disappointing in all the sectors included in the TEMAX index. Although the market did record growth in comparison to the second quarter, it faced considerable declines in comparison to the third quarter of 2008. At the same time, it has to be noted that the third quarter of 2008 was the second strongest quarter presented by TEMAX, and the whole of 2008 ended with unusually high results in comparison to the previous years. Therefore, it is questionable whether it is right to talk about a breakdown or a crisis. Perhaps we are only facing a "normal” turning tide of the market and, following a period of extraordinary growth, the market has returned to its "normal” values.
Compared to the second quarter, the sales growth in the third quarter proves that the market retains seasonal sales trends of the previous years. Therefore, we can anticipate that the sales value will continue to grow although, the excellent result recorded at the end of 2008 is rather unlikely.
Summary in table format
In PLN million // Q4-2008 etc.
Consumer Electronics
Photo
Major Domestic Applainces
Small Domestic Applainces
Information Technology
Telecommunications
Office Equipment & Consumables
GfK TEMAX® Poland
About the survey
GfK TEMAX® Poland is an index developed by GfK Retail and Technology to track the consumer durables markets. GfK TEMAX® 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 retail outlets worldwide. All reports and press releases are available at: www.gfktemax.com
Further information:
Hanna Żarnowiecka, +48 22 43 41 188, hanna.zarnowiecka@gfk.com
The GfK Group
The GfK Group offers the fundamental knowledge that industry, retailers, services companies and the media need to make market decisions. It offers a comprehensive range of information and consultancy services in the three business sectors of Custom Research, Retail and Technology and Media. The no. 4 market research organization worldwide operates in more than 100 countries and employs over 10,000 staff. In 2008, the GfK Group’s sales amounted to EUR 1.2 billion. For further information, visit our website: www.gfk.com
