SG tech unit sales dip by 3% in 1H 2023 amidst economic pressures
Market analysis reveals a challenging environment for premium tech products due to inflation and consumer spending constraints.
Singapore’s consumer tech and durables industry witnessed a 3% decline in unit sales in the first half of 2023 due to the broader economic pressures impacting consumer spending and market trends.
Mukund Tripathi, Head of Market Intelligence in Asia-Pacific at GfK, pointed out that rising inflation and interest rates have forced manufacturers to increase prices, putting additional pressure on consumers. This dynamic is particularly impactful in the premium tech product segment, where demand for high-end features and innovation meets the harsh reality of tightened budgets.
“In 2023, markets, including Singapore, are grappling with economic headwinds, affecting consumer spending,” he said.
Tripathi highlighted the dilemma facing sellers in today’s market: balancing the allure of premium products with the need for affordability. He explained that the lower end of the consumer spectrum is tightening its purse strings and making careful purchase decisions.
In response, marketers are focusing on consumers who can still afford premium products, offering innovative features that justify the higher price tags. “It’s crucial for manufacturers to provide value for money, blending innovation with convenience,” Tripathi advised.
When asked about which industry sectors are likely to benefit from a focus on premiumisation, Tripathi emphasized that no single industry stands out. “In every sector, there are manufacturers who are closely attuned to consumer needs and are innovating accordingly,” he said.
From major domestic appliances like voice-controlled washing machines and refrigerators to high-tech laptops and small domestic appliances for gifting, Tripathi observes a demand for premium features across various product categories.
Tripathi also warned of the risks associated with an inventory pile-up in a slow market. He advised manufacturers to avoid this by continuously offering innovative products that cater to consumer convenience and willingness to pay. This approach not only helps in maintaining sales but also positions manufacturers at an advantage over their competition.