IN Q4 2015, the Saudi Arabian Technical Consumer Goods (TCG) market recorded a double-digit decline of 10.5%, with a turnover of SR10.26 billion, when compared to the same period in 2014.
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Source: GfK TEMAX® KSA, GfK[/caption]
With the exception of Small Domestic Appliances — which reported growth of 10.7% compared to Q4 2014 — the remainder of the sectors reported a decline. The Photography (down by 50%), Information Technology (down by 24.7%), Office Equipment and Consumables (down by 22.2%), and Major Domestic Appliances (down by 11.7%) sectors all registered double-digit falls.
Small Domestic Appliances: Positive demand
In Q4 2015, the Small Domestic Appliances (SDA) sector in Saudi Arabia reported revenue of SR585 million with growth of 10.7%, compared to Q4 2014. All segments reported increases, with the exception of irons and juicers.Deep fryers, hot beverage makers and rice cookers all registered double-digit growth. Personal care products — such as hair clippers, hair dryers, hair styling products, and shavers — grew significantly, as did garment steamers.
Telecommunications: Premium features led the smartphones market
Telecommunications (the largest sector in the Saudi Arabian TCG market), reported a decline of 5.4% in Q4 2015, compared to Q4 2014, with turnover of SR5.28 billion. Smartphones remain the dominant segment, driven by premium features — including 4G, screen sizes larger than 5.5 inches, and cameras with more than 15 megapixels.
Consumer Electronics: Continued decline
Once again, sales declined in the Consumer Electronics sector, reaching SR1.13 billion in Q4 2015 — a 7.7% drop, compared to Q4 2014. Video game consoles, the second largest segment, reported only muted growth. However, headphones and loudspeakers continued to generate higher sales. A single-digit decline was reported in the Panel TVs segment, as revenue was supported by the growth of newer technologies, such as ultra-high definition (UHD) TVs. Double-digit falls were recorded in other segments.
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Source: GfK TEMAX® KSA, GfK[/caption]
Major Domestic Appliances: Increase in average prices, despite a decline
The Major Domestic Appliances (MDA) sector in Saudi Arabia reported a decline of 11.7% during the fourth quarter of 2015, compared to Q4 2014, with revenue of SR1.32 billion. Dishwashers and tumble dryers continued to attract consumer spending and both recorded double-digit growth. On the other hand, refrigerators, washing machines and microwaves registered double-digit declines. Average prices increased within the MDA sector with washing machines recording the highest growth — mainly driven by large-load capacities in fully automatic machines.
Office Equipment and Consumables: Sales impacted by challenging conditions
The Office Equipment and Consumables sector faced a challenging fourth quarter in 2015, recording total sales worth SAR220 million, resulting in a decline of 22.2%, compared to the same period in 2014. The inkjet and laser printers segments both recorded falls. Supported by multifunctional devices, inkjet printers accounted for a larger share of sales than laser printers. Sales of inkjet cartridges and laser toners also registered declines.
Information Technology: Emerging segments within the mobile computing segment
In Q4 2015, the IT sector registered revenues of SR1.63 billion with a 24.7% decline, compared to Q4 2014. All major categories — mobile computing products, desktop computing products, and mediatablets — witnessed a marginal decline. However, 2-in-1 devices reported strong triple-digit growth, driven by convertibles. While sales in recreational gaming hardware such as mediatablets declined, more advanced gaming segments within the mobile computing category sustained sales and demand in Q4 2015.
Photography: Further falls in sales across the sector
A steep decline of 50% was witnessed in Q4 2015 for the Photography sector, compared to Q4 2014, reaching sales of SR97 million. A rise in revenue growth for Wi-Fi-enabled digital single-lens reflex (DSLR) cameras was again registered. However, this was not sufficient to compensate for lower demand in other segments.
GfK TEMAX Kingdom of Saudi Arabia: Year ended on a low despite a bright start to 2015 for the Saudi Arabian TCG market
The Saudi TCG market started 2015 strongly. However, the decline in the preceding quarters had a significant effect. Mega promotions and sales within Q4 were not able to support the recovery of the Saudi TCG market. Falling oil prices, record remittances by expatriates, and geopolitical issues may have contributed to the curtailing of consumer spending. Despite all the challenges, strong investments are being made in the expansion of the retail sector in the coming year, which should support the recovery of the Saudi TCG market.
GfK TEMAX is an index developed to track the Technical Consumer Goods markets. The findings are based on surveys carried out on a regular basis by GfK’s retail panel. The retail panel comprises data from over 425,000 retail outlets worldwide. Since February 2009, GfK has also been compiling the GfK TEMAX index at an international level in more than 30 countries. It is the first index that includes all of the markets for Technical Consumer Goods in different countries. For more information www.gfktemax.com.
