The overall Technical Consumer Goods (TCG) market in Western Europe achieved a sales volume of €44.3 billion in Q2 2013. This corresponds to a decrease of 3.8%. In the first half of the year sales volume amounted to €92.5 billion, which is 2.2% down on last year's figures. On a country level, Austria, Sweden and Italy generated positive growth rates.
The Telecommunication (Telco) market was the only sector within Western Europe with overall significant growth rates. Driven by the ongoing smartphone boom, sales grew at double digit rates. Information Technology (IT) and Small Domestic Appliances (SDA) achieved partly healthy growth rates on a country level. The markets for Photo and especially Consumer Electronics (CE) however, are struggling with declines in all regions, caused by market saturation, subsitutional effects and price declines.
Telecommunication: Smartphones drive developments
Both in the second quarter 2013 and on a half year basis, the Telco market spearheaded the growing GfK TEMAX ® Western Europe results, due to strong double digit growth rates. In the first six months, total sales volume amounted to €19.1 billion, an increase of 12.6%. Between April and June roughly €9.6 billion was generated, which corresponds to a sales increase of 14.2%.
This positive trend was once again driven by the mobile phone segment. Although smartphone penetration in the key Western European markets is already relatively advanced, the average level of non-subsidized prices remained largely stable. While low end devices dominated the traditional mobile segment, premium products still performed well in the high end segment. Additionally, the choice of smartphones available to the consumer is bigger than ever. The portfolio ranges from cheap and simple entry appliances to so called phablets, a mixture between mobile phone and media tablet with screen sizes up to 7".
For total year 2013, GfK expects an ongoing dynamic sales development in the Western European mobile phone market.
Please note Telco figures are with non-subsidized prices from Q1 2013 onwards. Back data were reworked accordingly.
Small Domestic Appliances: Vacuum cleaners most successful
In the first half of 2013, sales in the SDA market amounted to a total of €6 billion, an increase of 2.3% on a year-on-year basis. The second quarter contributed with a growth rate of 1% and a sales volume of €2.9 billion as Sweden, Germany and Italy achieved the strongest growth. Vacuum cleaners were largely responsible for the success of the SDA market: rechargeable handsticks and robots proved particularly popular. Moreover, there was a clear trend towards bagless vacuum cleaners, while bagged appliances slightly suffered.
There is an ongoing positive sales trend for traditional kitchen machines in the Western European TCG market. Fully automatic coffee and espresso machines also contributed positively to this growth, thanks to their great performance in Germany. However, the increasing importance of these coffee machines and decreasing prices are having a negative impact on the demand for traditional filter coffee machines.
Further prospects are quite good, especially for the online business. Compared to the second quarter 2012, internet sales in the Western European SDA market rose with double digit rates.
Information Technology: Heterogeneous computing market
The Western European IT market achieved a stable growth rate of 0.1% in the first half year of 2013. Total sales volume of the first six months amounted to €27.2 billion. Top performers on a country level were Austria, Belgium, the Netherlands and Portugal. The second quarter, however, was 3.3% down on last year's level, corresponding to a sales volume of €12.6 billion. The weak performances of the markets in Spain, France, UK and Germany counteracted the healthy growth in total.
The IT market in Europe is mainly influenced by the development of the computing market. Consumer demand is still focused on innovative products like media tablets and ultra-thin notebooks. These segments are continuing to show very positive growth rates in Western Europe. However, these sales cannot compensate the decreasing demand for segments such as mobile and stationary PCs.
Major Domestic Appliances: Flattening decline rates in Italy
Sales in the Major Domestic Appliances sector amounted to €7.2 billion in Q2 2013 and €14.6 billion in the first half of 2013. These values correspond to a 0.7% and 1.1% market decrease. Positive developments were seen in Austria, Germany, and Sweden. Despite ongoing difficulties in Southern Europe, the decline rates flattened in Italy, which suggests that the poor performances have reached their lowest point already.
Sales of must-have products, like washing machines and refrigerators, saw positive results, whereas built-in products were still under pressure due to the negative real estate market. A trend towards lower price bands is visible in Italy, Spain, France, Greece and Portugal. On the contrary Germany, the UK and Sweden saw a trend towards more expensive items. Consumers continued to buy products with bigger capacities, high energy efficiency and convenience features. At the same time, Germany and Austria recorded an increased replacement demand due to the floods in spring, which heavily affected the sales of freezers.
Office Equipment and Consumables: Growth impulses are missing
Half-yearly sales figures of the Western European Office Equipment and Consumables market are quite low with a negative growth rate of 3.9%. Sales volume generated between January and June 2013 amounted to €7.7 billion. The second quarter was also down on last year's figures, with a sales decrease of 3.7%, corresponding to a sales volume of €3.7 billion. Spain and Greece were the only countries defying this trend, generating positive growth rates.
Nevertheless, the Office market in total is still under pressure. However, the negative trend was slightly reduced or stabilized in most countries – this is a small positive to take from Q2 2013.
Laser, as well as ink jet devices, struggled with significant sales decreases. The sales of multifunctional devices showed varied trends in Western Europe. Although overall sales for these niche products remained negative, the declines for the inkjet segment were less severe. One of the exciting questions for the future will be, whether the widely observed topic of 3D printing will have an impact on the overall Office market.
Photo: High value cameras trigger impulses
Western European consumers spent a total of €1.8 billion on photo products in Western Europe in Q2 2013. This is a quarter on quarter decrease of 12.9%. The cumulated sales figures reached €3.5 billion, which is a 9.2% market decline compared with the first half of 2012. On a country level, only the Austrian market could defy this trend and achieve a positive growth rate.
Within the Photo market, there are different trends and developments. Cameras with similar functionalities to smartphones are witnessing a decline in demand. Positive signals, however, came from the segments of high value digital cameras and superior fixed-lens cameras, which were able to increase sales.
GfK expects further positive growth from technically well-equipped cameras, which offer significant improvements in terms of picture quality and handling, compared to smartphones.
Consumer Electronics: Online streaming products are growing within declining market
Sales in the Western European CE markets amounted to a total volume of €6.5 billion in Q2 2013. This corresponds to a decrease of 24%, compared to the previous year. This decline was mainly due to missing external sales influences, like in 2012, where the digital switchover and the European football championships led to extraordinary sales increases. Although the first half year development was somewhat better, the market still decreased by 19.7%, corresponding to a sales volume of €14.4 billion.
As consumers invest more in mobile internet devices, it is obvious that being connected to the internet at home is also important. As a result, the share of Smart-TVs within the flat-TV segment rose in the second quarter of 2013 (+60% in Germany). This link to mobile internet devices also triggers sales in audio. Consumers need audio items which can be linked easily to their audio content on their smartphone or tablet. As a result, sales for respective products like docking speakers increased.
As the streaming audio market in Western Europe is gaining popularity, GfK expects this development to continue in the second half of 2013.
GfK TEMAX® Western Europe: Awaiting the end of the financial crises
The sales volume of the second quarter of 2013 of €44.2 billion as well as half year's total sales of €92.5 billion, were down on last year's figures. This clearly shows that, despite positive developments in Portugal, the financial crisis is not over. Though several countries have hit the bottom of the recession, the economic situation is only slowly gaining momentum. Instead, most European countries are still restrained by high unemployment rates and worse economic conditions. Nevertheless, there is hope that the financial crisis is coming to an end in the long run. This is supported by estimations of the European central bank and indicators which show signs of a slow recovery. These are important factors for stabilization of the Western European technic market in the second half of 2013.
