While IT spending faces an extended period of decline, the Aussie public is still prepared to open its wallet for consumer electronics, according to a survey commissioned by Canon Australia.
While IT spending faces an extended period of decline, the Aussie public is still prepared to open its wallet for consumer electronics, according to a survey commissioned by Canon Australia.
The Canon Consumer Digital Lifestyle Index shows spending on consumer electronics products in the second half of 2008 reached a massive $3.3 billion up 14 per cent to $3.3 billion and the highest half-year result recorded since the index was begun in 2003. Unit sales were up 20 percent to 8.47 million units.
Categories that defied the economic downturn were digital still cameras, games consoles, digital media players and flat-screen TVs, said Canon.
Sales during the second half of 2008, the digital lifestyle products covered in the Canon CDLI1 soared in sales by 20% to 8.47 million units, while the industry revenue generated by the Canon CDLI categories increased by 14% to $3.296 billion. Total sales for the Canon CDLI product categories grew several times faster than for the retailing industry as a whole. Total sales for the entire retail sector2 grew by 3.3% over the year (from Q4 2007 to Q4 2008), whereas total Canon CDLI sales revenues grew by 10.1% over the same period.
Digital still cameras continued to be a star performer in the second half of 2008, with unit sales up 317,000 or an astounding 23% compared with the same period a year ago. In volume terms, digital still cameras were the second largest category in this report, just behind digital media players, reflecting the growing importance and integration of digital imaging in Australian consumers’ lives.
“Despite the high penetration of digital still cameras3, Australians bought more than 2.6 million units last year, taking advantage of outstanding consumer value available in the market to upgrade to the latest technology,” said Ryan. “We’re seeing a creative revolution taking place in the market with consumers upgrading to more advanced compact camera models and explosive growth in digital SLR camera sales4 of 83% in the fourth quarter and 52% for the full year. Australians have also demonstrated their attachment to imagery through the upward trend in the number of pictures taken each month.”
According to Ryan, 2009 holds plenty of promise for the Australian technology sector despite the generally negative economic sentiment being reported: “Performance so far this year leaves us feeling optimistic about 2009, and we expect this trend of year-on-year growth to continue. Digital SLR cameras in particular are achieving very strong growth despite the economic uncertainty, so we’re confident that we’ll close out the year in positive territory as a business.”
Highlights
· Product categories with the highest market size by value are:
o LCD televisions (32.1 percent of total Canon CDLI sales)
o Plasma televisions (16.9%)
o Game consoles (15%)
o Digital still cameras (12.7%)
o Digital media players (9.9%)
· DVD players, DVD recorders, (single function) inkjet printers and photo printers all declined in both volume and value terms.
· Average selling prices fell in 9 of the 11 product categories covered by the Canon CDLI (by around 8% on average from Q4 in 2007 to the same period in 2008), delivering both a challenge and an opportunity to players in the Australian consumer electronics industry.
· Lower selling prices reduced the overall rate of revenue growth for the Canon CDLI product categories. Total sales in the second half of 2008 increased by $404 million (+14%) on the previous corresponding period, whereas the growth rate was 17% a year earlier (from 2H 2006 to 2H 2007). This slowing of growth represents a clear challenge to the consumer electronics industry to find ways to innovate and stimulate sales growth in 2009.
· While lower selling prices made digital technology more accessible and propped up sales volumes, a fair proportion of the money saved by Australian consumers seemed to go towards the purchase of value-added items. For example, along with their digital cameras, around 62% of recent camera buyers bought additional items such as memory cards, camera bags, extra batteries, tripods, flashes and/or additional lenses. Buying patterns such as these represent an opportunity for retailers to simultaneously add value and minimise commoditisation through creative product packaging (i.e. bundling), cross-selling and up-selling.
1 Source: Australian Bureau of Statistics Cat. No. 8501.0 – Retail Trade, Australia, December 2008, seasonally adjusted.
2 CDLI categories: Digital still cameras, digital camcorders, inkjet printers, photo printers, multi-function devices, plasma TVs, LCD TVs, DVD players and recorders, digital media players and games consoles.
3 Around 65% of Australians own a digital still camera. Source: GfK Retail and Technology.
4 Source: GfK Retail and Technology. Digital SLR unit volumes in 2008 were up 52% on 2007. Digital SLR unit volumes in Q4 2008 were up 83% on Q4 2007.
