Mid-range TV sales hit by war and cost of living in first half

After a strong 2020 driven by the pandemic stay-at-home, the global market for consumer electronics faced a slow-down in 2021 that continued in the first half of 2022, with TV sales seeing a notable downturn, according to figures released by GfK ahead of the IFA show in Germany.

From January to June 2022, the TV market recorded a 6% decrease in total sales to US$31 billion, compared to the same period of the previous year, according to GfK.

Almost all display sizes experienced this decline. Only the very large display sizes continue to show an upward trend, with sales of TVs with screen sizes over 75 inches increasing by 21% compared with the first half of 2021.

Overall consumer electronics sales between January and June this year saw an 8% drop compared to the same period last year, standing at a total of US$39 billion.

GfK said that the industry is hoping that the football World Cup will boost TV sales in Q4. However, looking at the full year, GfK expects overall sales to decline in 2022.

The research outfit said that the impact of the war in Ukraine and runaway inflation caused consumer sentiment to plummet across the board in the first half of this year, hitting sales. In addition, in spring 2022 there were lockdowns in the largest sales market China, which further impacted sales.

The downturn in product demand has led to falling prices despite inflation and increased expenses within the supply chain, said GfK. The average cost of a TV was around US$566 in June 2021 but dropped to US$502 by June 2022. The research outfit said the fall is particularly visible in mid-range segments that have not seen any significant innovation upgrades or addition of premium features.

“The football World Cup in the fourth quarter could offer an opportunity to compensate for the weak first half of the year. Experience has shown that major events such as this increase demand, particularly for TVs. However, given the poor consumer sentiment, we expect this effect will not be big enough to keep sales in the consumer electronics market from declining during 2022 overall,” said Jan Lorbach, GfK expert on consumer electronics.

“Between falling demand and average prices, premium products continue to be the areas of interest for retailers and manufacturers. As budgets become tighter, there is a shift in consumer electronics demand toward consumers with above-average incomes. Accordingly, we expect that devices with premium functions will achieve long-term growth.”