Technical Consumer Goods – The State of the Global Market

The recent IFA Global Press Conference in Lisbon has set the tone for the coming months in terms of global industry trends – with research organisation GfK underlining the fact that turnover remains high.

Jürgen Boyny, Global Director, Consumer Electronics, at market researcher GfK Retail and Technology, said, “Nearly $950 billion in total annual sales are expected in 2017, with even more in 2018. Whether at home or on the road, the smartphone is shaping market advances. The smartphone is connecting all areas of daily life, from the TV in the living room to the washing machine, coffee machine, or bathroom scales. The Internet of Things has already reached the consumer.”

Describing the “technical world” as the “always on” world, Mr Boyny says emerging regions are driving the market. The Chinese market is now as big as the North American market, making up a total of 23% of global demand. This growing market made up for 22% of global demand in 2016 and 21% in 2015.

The main driver is of course mobile connectivity as the smartphone is used for so much more than just the telephone. Mobile payment, VR & AR, smart home and connected cars are all enabled by the smartphone. Smartphone sales continue to grow rapidly, with GfK forecasting 1.48bn unit sales in 2017 (up from 1.41bn in 2016) and 1.55bn sales in 2018.

Mobile payment is also a revolution for retailers. Mr Boyny underlines the fact that in China, one can “mobile pay” for virtually anything today. In this sense, China is eight to nine years ahead of the west. In-store mobile shopping is running at 24% in China as opposed to just 2% in the USA.

VR & AR: These will be big drivers this year. 70% of leading edge consumers will purchase VR in 2017 for gaming. VR is only at the beginning.

Smarthome: Most homes are “becoming” smart as TVs become smart, and entertainment becomes smart – from the cloud. Home automation is coming of age, and here again, the Chinese market is leading.

Connected / autonomous cars: There are still a lot of legal issues. But the car is already connected to the smartphone, and many cars have voice control. This development will continue.

Wearables: The biggest market is China – this year +63% China has 36% market share in 2016 – is the biggest and fastest growing.

Overall, the Technical Consumer Goods market is driven by innovation. Connectivity will enter all sectors of daily life, but according to GfK’s Jürgen Boyny, the “Internet of Things” is a difficult thing for retailers to present, as people don’t come in asking for IoT. Consumers, he says, have to understand the benefits of connected devices, connectivity needs to be shown as a new benefit and people have to become excited about it.