According to the GfK TEMAX data, the third quarter of 2013 (Q3) is the first quarter to see negative results in the Russian Technical Consumer (TCG) market, by now just at 1,9% below Q3 2012.The turnover of Q1-Q3 2013 saw no decline exceeding RUB 900 bln but growing only by 1%. This stagnation and slowing down of the market has been driven by the decreased demand for IT, Office and Photo.
Telecommunications: demand for cheaper smart phones
Telecom is the only sector remaining in double digit growth in Q3 2013. The market of smart and mobile phones has shown almost 10% unit growth, while growth last quarter was less than 8%. We are seeing an interesting trend in average selling price decreases for smart phones at 14% year on year, while average market selling price on a half-year basis sees declines of 7%. The driver behind this growth is the rise in popularity of cheap smart phones. Smartphones cheaper than 3000 rubles now make up more than 15% of the market, during the 3rd quarter of the last year their market share was less than 1%.
Small Domestic Appliances: promising growth
SDA market grew by nearly 7% in terms of value against 3rd quarter 2012 with average pricing rising by 9%. Beverages segment (hot beverage makers, kettles and juicers) showed good performance, while most of the kitchen appliances product groups (bread makers, hand blenders, meat mincers) continued the negative trend. Vacuum cleaners market remained constant despite the dramatic growth of the robot and handstick segments. The demand for ironing systems continues to grow, leading to the significant increase of both units and value growth of the product group in general.
Major Domestic Appliances: customer goes online
MDA market still shows growth, 5% in this most recent quarter. Built-in growth of 15% in Q3 2013 has not offset the stagnation in freestanding. Internet is remaining the main growth driver for MDA market in 2013. In Q3 2013 one in every eight MDA products is bought online.
Consumer Electronics: PTV remains main growth driver
The CE market remains stable in Q3 2013, supported by PTV category & consumer demand for 3D and smart TV. As technology becomes cheaper, more affordable offers become available. A major growing category is set-top boxes, exceeding 40% growth in value compared to the last year period. Meanwhile PTV market growth increased only slightly more than 1% in value. Although we live in a computerized era, television remains the basic entertainment activity for Russian consumers. The variety of federal, locally available and free channels offered in big cities is quite impressive (>40 channels), however, the growth of set-top boxes continues, due to quality, signal receipt and content issues. Despite growing consumer demand for set-top boxes, the DVD/BD players market is declining seeing a more than -35% drop compared to the Q3 2012. However, the BD players with 3D capabilities continues to grow.
Photo: difficult choice
The Photo market continues to see a downward trend. There has been shift of interest towards more sophisticated features, such as ultrazoom or embedded wi-fi, as well as a growing share of SLR cameras being sold, now reaching over 53% of total value. With current advancement and accessibility of DSC cameras built into smartphones, the future of the standalone digital camera remains uncertain. We expect professional cameras to become more sophisticated and increase their share in DSC market, with smartphone cameras also improving in technical advances. Amateur photography is likely to switch more and more to smartphone, while desire for quality rather that speed will further push the share of the professional segment.
Office equipment: optimistic news and a lessening rate of decline
The 2013 market downturn seems to be stabilizing, with Q3 sales being just 10% lower than those of Q3 2012. The decline has mainly been driven by the inkjet segment – sales of the less seasonality-dependent laser printers grew by 14% to Q3 2012, exceeding growth levels in Q3 2012. Inkjet MFDs (being more popular among schoolchildren and students) performed well, increasing their share versus Q2 2013 influenced, as always, by back-to-school purchases.
Information technology: facing deep trouble
The Russian IT market depression deepened in Q3, resulting in a 14,5% value loss compared with Q3 2012. While the increasing volume of the media tablets market overcame that of mobile computers, media tablets generate far less in terms of market value. The total majority of IT markets are driven by the lower price bands and decreasing average price. The mobile computer market finally enters the stage where negative growth has expanded to its biggest and the most stable part, the portables. While in Q2 2013 the sales of mobile computers other than netbooks were only 2.5% lower than a year ago, in Q3 the sales of mobile computers decreased by 10% compared with the same period of 2012. The sales of advanced form-factor mobile PC as ultramobile continued to grow, but their share is still too small to affect the total market trend. It is remarkable that all mobile PC price bands sale decreased in Q3, unlike the previous periods driven by the growth of notebooks priced below $500.