MAGDA PURICE

  |  12.11.2013

The sway of a technology-aware consumer

The half year facts show that telecom segment drives the technical consumer goods market forward, along with the sales of major domestic appliances.

Magda Purice

MAGDA PURICE

Freelance Journalist


The latest research of GfK Temax Romania show that Technical Consumer Goods (TCG) market followed the trend set in the first quarter, showing a slight increase of 4.7 percent in Q2 2013 when compared to the same quarter of 2012. The first six months of the year brought about an increase of 4.3 percent over the first half of 2012, reaching a value of EUR 699 million.

 
 
The study has been developed for Q2 2013 and states that the largest segment was the Telecommunication (Telco) sector, with a total value of EUR 99 million, and it was also the one to generate the most important increase of value, that of 17 percent, when compared to Q2 2012. Another notable growth was the one registered by the major domestic appliances (MDA) sector, 4.9 percent over the same quarter of the last year in terms of value, the first quarter of increase for the sector since 2011. The Photo market showed a double-digit decrease of 25.5 percent, while the Office Equipment with 8.8 percent decrease and consumer electronics with 5.2 percent downsize were the only sectors to record negative evolutions.
 
 
THE SMART PHONES CONQUEST IN TELECOM
Telecom sectors saw a 17 percent in Q2 of 2013 compared with the same period of previous year, according to GfK study, with the non-subsidized value being estimated at around EUR 99 million. The smart phone segment was the main driver, while the feature phones market continued to decline. The periodically launched smart phones in the last year stood for a 58 percent increase in the total smart phones market in Romania, while the mobile phones registered a decrease of 29 percent within this segment.
 
 
Also, the telecom market that has been defined by the significant news of 4G licenses bid organized one year ago and in July this year, the telecom market regulatory body ANCOM (Romanian National Authority for Management and Regulation in Communications) announced it has handed in the licenses for the use of the radio spectrum valid until 2029 to operators Orange Romania, Vodafone Romania, Cosmote Romania, RCS&RDS and 2K Telecom.
 
 
Based on current trend, Romania registers one of the more dynamic and competitive telecom market in South Eastern Europe, with a penetration that has reached 115 percent only for active subscriptions. Just to compare, the fixed telephony penetration rate per 100 inhabitants (computed as the ratio between the total amount of access lines and the number of inhabitants in Romania) was 24.6 percent in 2012, whereas the fixed telephony penetration rate per 100 households was 54.2 percent.
 
 
According to data provided by National Authority for Management and Regulation in Communications (ANCOM), the revenues obtained from the provision of electronic communications networks and services in 2013’s first half amounted to RON 7.48 billion, up by 3.5 percent as compared to 2012’s same period. In the same time, fixed telephone and leased line services registered revenue decreases of approx. 11 percent compared to the first semester of 2011, down to RON 745 million and, respectively, RON 133 million.
 
 
 
INFORMATION TECHNOLOGY: MEDIA TABLETS ARE COOL
Directly linked to the smart phones market, the IT market recorded a slight growth of 2.7 percent in the second quarter of 2013, when compared to the same period of the previous year, summing EUR 88 million, the GfK study reads.
According to their results, media tablets doubled in value and grew more than threefold in volume. In comparison, the mobile computing segment slightly decreased in the second quarter of 2013 compared to the same period of the previous year. The largest declines on this segment has been registered by desk computers, monitors and webcams, while keyboards and pointing devices are still looked for on shelves.
 
PHOTO MARKET DISPLAYS FOGGY RESULTS
A picture is worth a thousand words. But how worthy is now the photo market and how does it fight with the smart phones invasion? The study show that each year, the sales for entry level compact photo cameras decrease by 10 percent.
Globally, the sales for photo cameras lost 25 percent in April and may this year, compared with the same period of last year while on locale market, according to retail representatives, the mainstream photo cameras decreases by 10 percent each year.
Currently, Romanians take pictures with 280.000 photo cameras. Moreover, according to GfK Temax study, after the peak of Christmas and Black Friday sales, Q2 of this year brought a sudden decrease of 25.5 percent on this segment.
But not only the entry level compacts saw decrease, also the high end compacts and DSLRs contributed to the decline of this segment.
 
KEEN ON HOUSEHOLD
Both major and small domestic appliances registered increases at half year, a 4.9 percent increase for MDA and 8.7 percent increase for small appliances. The total market is estimated at EUR 97 million, with major domestic appliances taking two thirds of the pie. The main growth drivers within the MDA market remain the built-in appliances such as ovens and hobs, as well as dishwashers, hoods and freezers which showed double digit increase rates in this second quarter. In consumer electronics department, a decline in value of 5.2 percent has been registered in Q2 of 2013 and amounted to EUR 52 million worth market in Romania. For the first time in the last two years, the panel TV and plasma segment declined heavily while LCDs remained at a stable sales volume.
 
RETAIL NEVER SLEEPS
There are few names that race for the heart of Romanian consumer and some of them have seen interesting shape changes in the last years, especially since the buyer became more price-conscious. Besides the restructuring of retail networks , by opening new stores and shutting down locations that doesn’t work anymore, the retailers optimize more and more the online sales capabilities. There is no surprise that, in the mind of Romanian consumer, the online store eMag competes with the other retailers such as Altex, Flanco or Domo.
 
 
This year, eMag, controlled by South Africa based internet group Naspers announced a structure-oriented deal as its affiliated marketing platform Profitshare was taken over by the company Conversion Marketing, where eMag owns the majority of shares. Conversion Marketing already integrated other online retailers such as PCfun, ElectroFun, Flanco, La Redoute and Noon Copenhagen. Also, Profitshare, an internal affiliated marketing program of eMag has been shut down and transfer the accounts of user to the new owner, which will run it under the name Profitshare 2.0. Also, Domo changes its shareholder structure, following a board decision agreed on December last year. The new owner is a fund based in Lichtenstein.

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