Premiumization, omnichannel and @home norm to drive growth for technical consumer goods in 2022: GfK
GfK, an AI-powered SaaS and data company, released the sales trends that have shaped the Technical Consumer Goods (TCG) industry in 2021 including product categories like smartphone, laptops, consumer electronics, home appliances, etc. GfK Market & Consumer Intelligence powered by gfk newron reveals the shifting preferences of Indian consumers across product & channel since pandemic.
2021 was all about market recovery
Nikhil Mathur, Managing Director – India, GfK explains: “GfK Market & Consumer Intelligence shows that surge in premiumization trend, smaller cities growth and online retail led by @home norm were they key growth drivers for Technical Consumer Goods (TCG) industry in 2021. The Technical Consumer Goods industry clocked 22% value growth, led by Major Domestic Appliances (37%) & IT Computing (32%) in Jan – Nov 2021 compared to 2020 during same period. We expect 2022 to continue on the recovery path with evolving consumer needs in and beyond metro cities.”
Overall, Technical Consumer Goods (TCG) industry in 2021 has registered double-digit value growth compared to the previous year. Consumer Electronics market, including Television & Audio Home Systems, registered 17% value growth and telecom comprising smartphone market grew by 18% in terms of value. However, it is essential to understand the TCG industry sales performance in comparison to pre-pandemic levels since 2020 witnessed several market disruptions owing to lockdowns and two waves of the pandemic.
Against all odds: Premiumisation trend continues to drive the growth
Premiumization which started to see an upward trend in 2020, has continued in 2021 and we expect the same to be the case in 2022. At a TCG level, the average selling price (ASP) across offline & online channel has grown by 21% in 2021 driven by telecom (21%) & consumer electronics (24%) during Jan – Nov 2021/2020. The similar trend was closely followed by IT (14%), SDA (12%), and MDA (12%).
Despite the price hikes induced by supply chain disruptions and chip shortages, GfK Market Intelligence for offline channel validates the view that when making new purchases, consumers choose larger, faster, and better-equipped devices. Thereby, spending more money on each purchase on an average. Across categories, we can see the increasing salience for premium segment across consumer and tech product categories.
The pandemic triggered some shifts in buying behavior. GfK Consumer Intelligence reveals the increasing preference of online shopping via general shopping apps, brands’ own websites and social media. This reflects the rising consumer trust and digitalization of purchase journeys fueling the online retail contribution to overall category sales of consumer tech products. This trend is expected to continue with evolving consumer needs and choices across big and small cities.
At a total TCG level, more than 1/3rd of all sales is registered through the online channel, up from 27% in 2020. In 2021, small domestic appliances (SDA) accounted for 47% online channel value contribution followed by IT (39%) and telecom (38%).
There is reason for marketeers to feel positive about 2022 as we expect the trend of premiumization and omni-channel retail to continue into 2022.
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