A fast growing and promising market
Share of organized retail (i.e., TSS chains) in Consumer Electronics market has been increasing steadily in the past few years. In 2011, the total share of organized retail in the CE market was 20% whereas this number climbed to 27% in 2013. It is widely expected that by 2020 the share of TSS chains in the CE market will reach 50%. The two main drivers for this rapid growth are:
- Changing consumer spending behaviors:
- Most of what is sold in TSS chains is evolving from discretionary spending items to basic necessities;
- More variety:
- Today’s consumers increasingly prefer to shop where they are offered a wider range of options (be it brands, models, etc.).
Worth to note
The Consumer Electronics market has grown 13% per year in the last four years and is expected to grow approximately 10% per year in the next three years. On the other hand, the TSS channel has grown approximately 26% per year and is expected to grow around 17-25% per year in the near future.
Market surveys show that Technology Retailer market is in early stages of this transition. The factors such as:
- Penetration of computers, internet and smartphones is significantly lower than EU countries (see the chart below),
- Increase of per capita income and wealth of population,
- Increasing urbanization,
- Changes in the definition of needs and living standards,
- Diminishing renewal period of consumer durables (e.g., 5 years for televisions, 7 years for MDAs),
- Change of consumer and supplier preferences in favor of organized retailers.
all point to strong growth opportunities for technology retailers at least until 2020. Furthermore, these underline the fact that products offered in TSS chains are no longer considered discretionary spending, but basic needs for contemporary consumers.