Global consumer electronics market under pressure


Attractive bright spots amid general declinesAhead of IFA Berlin, one of the leading global events for Consumer Tech & Durables, GfK expert Jan Lorbach reveals the latest findings, developments and trends affecting Consumer Electronics (CE). The global market is currently going through a difficult phase, with sales down 12 per cent and an 8 per cent drop in units sold in the first six months of 2023 compared to the same period last year. Annual results for 2023 may not look more promising either. However, there are some attractive opportunities in individual segments.

"We had already predicted saturation in 2023, following record sales during the pandemic and the market was additionally hit by high inflation and the resulting pressure on consumer budgets" explains Jan Lorbach, GfK expert for Consumer Electronics. "Consumers are currently focusing their reduced disposable income on travel and leisure activities rather than technology. Industry hopes are still pinned on the economic recovery in China, but this has not yet produced the desired positive effect. In this low-demand landscape, it becomes even more important for retailers and manufacturers to understand their consumers' preferences at a detailed level to attract as much consumer spending as possible."

Premium TVs are no longer the growth superhero for all regions

Like the market as a whole, the TV sector is struggling with falling demand. In fact, between January and June 2023, sales fell by minus 15 per cent compared to the same period last year, which is higher than the overall average for the overall CE market.

Last year, premium TV sets were widely seen as the saviour of the TV market. Premium models were the only sub-segment that continued to grow across most of the world. This year, however, the picture is much more nuanced: premium TV sets still outperform the market average, but no longer manage to achieve positive growth in some regions, such as Western Europe:

Soundbars follow the same trend: overall market sales are down significantly by 10 per cent compared to the same period last year, while premium units continue to grow, such as those with DolbyAtmos/DTS:X, which are up 10 per cent.

The reasons for this development are obvious. While low-income households have had to economise, above-average-income buyers still have a budget to spend and often opt for premium devices. Thus, the share of TV buyers with a middle to high income is already at 59 per cent in the first quarter of 2023, compared to 49 per cent in 2021. As a result, the global share of TVs larger than 75 inches rose from 15 per cent to 18 per cent in the period under review.

Audio is the bright spot and continues to grow

One of the few positive signs in the CE market came from the home audio segment. From January to June 2023, this segment saw a 5 per cent rise in sales revenue and a 3 per cent increase in the number of units sold compared to the same period last year. The growth was mainly driven by smart audio (+2 per cent) and high-end components, tuners, amplifiers or receivers. Particularly impressive is the 30 per cent increase in wireless headphones with headband - largely driven by the younger generation following this current fashion trend. According to gfknewron Consumer, the share of buyers in the 16 to 24 age group rose from 15 per cent in 2021 to 26 per cent in the first quarter of 2023.

Conclusion and outlook

Overall, the global consumer electronics market is expected to end 2023 in the red due to weak demand. However, specific growth opportunities remain, especially for innovative devices or devices that appeal to premium consumers. Sales can also be boosted by unique or attractive designs, such as wireless headphones with headband. Retailers and manufacturers need to be aware of these trends and react quickly to offset falling demand for other product lines.

About the methodology

Through its retail panels, GfK regularly collects POS data in more than 70 countries around the world for consumer electronics, photography, telecommunications, information technology, office equipment and small and large household appliances. All figures are based on the GfK panel market, with global data excluding North America and shown in US dollars unless otherwise indicated.

gfknewron is an always-on platform that combines market, consumer and brand data with AI-powered recommendations. It enables companies to gain actionable and coherent insights and act quickly to drive sustainable growth. The platform offers three dedicated modules: "gfknewron Market" for market and competitive insights, "gfknewron Consumer" for in-depth consumer insight and "gfknewron Predict" that makes recommendations for businesses based on market data and AI-powered intelligence.

About GfK

For more than 89 years, we have been winning the trust of our customers around the world by solving critical questions in their decision-making process. We drive their growth by providing a comprehensive understanding of their consumers' buying behaviour and the dynamics affecting their markets, brands and media trends. In 2023, GfK merged with NIQ, bringing together two market leaders with unrivalled global reach. With a holistic retail vision and the most comprehensive consumer insights - delivered with advanced analytics through state-of-the-art platforms - GfK drives "Growth from Knowledge".


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