GfK’s TCG Overview 2022 report outlined the key trends impacting the TCG industry as sales of small domestic appliances (SDA) saw growth at 11 percent while major domestic appliances (MDA) stood at 7 percent.
Telecom sales declined by 2 percent while office equipment and IT products reeled from a sales drop at 6 percent.
Singapore’s photo sector reported 33.1 percent growth and recovered back to 80 percent of pre-Covid retail revenue. This is due to the resumption of travel after the lifting of border restrictions in the post-pandemic era.
Office equipment and IT goods underwent slower growth after demand for home workspaces in the post-pandemic age had been fulfilled and employees returning to the office. The demand for telecom products had also softened with possible longer replacement cycles and as unit production waned, however foldable mobile phones have created a niche in the premium segment reporting value growth.
“Concerning SDA, the popularity of omnichannel retail platforms which flourished during the pandemic contributed to the boost in sales while premiumisation in MDA such as front-loading washing machines and multi-door cooling equipment aided the hike.
“Both SDA and MDA witnessed growth due to manufacturers focus on the development of sustainability and smart (connected) device features.” said Mukund Tripathi, Head of Market Intelligence, APAC, GfK.
Evident price hike and sales surge to beat the impending GST rise
With manufacturers pressured to transfer rising input costs to consumers, a price hike is noticed in the Singapore market while a sales surge was revealed in December to avoid the upcoming GST increase from January 2023 onwards.
The average prices of bulky and higher cost items had risen with television sets by 9.6 percent in 2022 from 2021 and washing machines by 11.5 percent. Consumers are willing to spend more due to buy now, pay later schemes and zero percent interest instalments. The government and property developers catching up on housing delays in the post pandemic period also led to the surge in sales.
In December last year, the last month before the GST rate hike, consumers also made earlier than planned purchases as retailers introduced buy now, deliver later schemes, resulting in the sales growth of washing machines, refrigerators, vacuum cleaners and panel television sets at 62 percent, 48 percent, 33 percent and 29 percent respectively.
Sales inevitably declined across these key categories in January 2023, while the first half of the year is expected to be slow.
Two key categories in MDA, namely the segments of front-loading washing machines and multi-door cooling refrigerators, fueled the premium segment with a faster rate of growth.
Since 2019, the online value share of the total TCG market increased threefold to 26 percent in 2022. The highest shift seen was in SDA, which stood at around 50 percent in 2022 compared to 15 percent in 2019 during pre-Covid times.
Online sales of telecom products also increased from 8 percent in 2019 to 24 percent in 2022, which garnered a 38 percent share in Singapore’s TCG market. With a rise in online shopping, omnichannel retail platforms consequently gained prominence since the pandemic which sparked a boost in sales in SDA.
Sustainability set to progress
Sustainability is a key emerging trend in the TCG sector, acting as a differentiator for brands and manufacturers communicating sustainability actions that are imperative in connecting with environmentally minded consumers. During GfK Insight Summit 2022, it was discussed that monetary concerns are transferred into buying attitudes, which means that brands can command more cash for illustrating being green.
With a continuation of uncertainties in internal and external factors, there will be pressure in managing inventory and smart and innovative product launches to stay ahead of the competition. This will lead to the conception of innovative product features and smart devices.
2023 brings an opportunity for brands and manufacturers with a tourism recovery in the post-pandemic world, the opening of the Chinese economy and a decrease in transportation and shipping costs to drive product innovation and differentiation yielding higher profits.
