Consumers are looking for value, and vendors are responding with affordable products. Photo: Reuters

CAPE TOWN – Revenues in South Africa’s technical consumer goods market climbed 8 percent year on year in the second quarter of 2018, boosted by a 16 percent rise in the telecommunications sector and a 17.4 percent increase in small domestic appliances, according to point of sale data from market research firm, GfK South Africa. 

The data also showed that the major domestic appliances and consumer IT segments grew by 3 percent and 6.6 percent respectively.

The smartphone segment, one of the biggest contributors to South Africa’s technical consumer goods market, was given a boost by growth in sales of larger display devices together with the continued adoption of entry-level smartphones. 

Hot air fryers continued to drive the expansion of the small domestic appliance market as consumers opted for healthier lifestyles.

“The South African consumer technology market is holding up reasonably well under difficult economic conditions. Consumer confidence in Q2 2018 was significantly up compared to Q2 2017, which helped to lift sales in the consumer technical goods market,” said Kali Moahloli, commercial head for market insights at GfK South Africa.

Affordable products

“In the telecommunications and IT sector, consumers are looking for value, and vendors are responding with affordable products. Tier-two manufacturers are doing well with value-for-money smartphones with large displays, while we saw strong sales for entry-level (sub-R4000) mobile computers,” says Moahloli.

In the IT segment, sales in the media tablet category continued to deteriorate with a 42 percent drop in unit sales, while smartphones’ value overall increased by 16 percent. 

Revenues in the consumer electronics sector grew 7.8 percent, driven by strong demand for ultra high definition and large screen panel televisions. However, revenues in audio home systems, receivers and headphone categories all dropped sharply.

Highlights from this year’s 2nd quarter:

  • Kettles and toasters – the first and fourth largest categories in small domestic appliance units and value – registered double-digit growth in unit sales due to an increase in average selling price and robust consumer demand.
  • Entry-level and mid-range units made up 45 percent of the value of second quarter 2018 desktop sales, compared with 28 percent in the second quarter of 2017.
  • The monitor market performed well, thanks to better desktop sales and a growing selection of high-value monitors from major brands.
  • The photography category enjoyed double-digit year-on-year growth during the second quarter of 2018, lifted by good sales of high-end models and printing cameras. Mid-range cameras did not perform well, however, with consumers sticking to their smartphones for casual photography.
  • The office equipment category has continued its decline, falling 5.4 percent in value. A sharp, double-digit fall in printer cartridge sales and fierce price competition were major factors in this.

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- BUSINESS REPORT