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Portable consumer electronics
Portable consumer electronics continued to drive overall value sales of consumer electronics in South Africa during 2014. The bulk of value sales originated from mobile phones, which remained the most dynamic category in terms of innovation, as well as volume growth. The continued introduction of cheaper smartphones to the market resulted in higher demand from consumers with limited spending power.
International brands dominate consumer electronics
Just like any other African market, the consumer electronics market in South Africa continues to be defined by trends observed in overseas markets, where most production takes place. Consumers in South Africa have also developed a perception that international brands provide superior quality when compared with local brands, and often opt for international brands if their spending power allows them to do so. Leading electronics and appliance specialist retailers often prefer to stock such brands in order to remain competitive, as well as to uphold their reputation as retailers of high-quality brands.
Electronics and appliance specialist retailers leads distribution in volume terms
Consumers in South Africa still feel more comfortable making purchases of electronics through specialist retailers. Electronics and appliance specialist retailers remains a successful channel due to the specialist knowledge of such outlets, which allows them to support customers before and after purchases. Most of the retailers in this channel sign quality agreements with their suppliers, which means they cannot compromise their relations with customers – they cannot provide sub-standard products.
South Africa is yet to convert to digital from analogue transmissions
The South African government is yet to convert to the digital transmission signal from the existing analogue transmission system. Trade sources remain concerned that the country may miss the 2015 deadline set by the International Telecommunication Union (ITU), as it continues to weigh options to roll out equipment to support the digital transmission of television signals across the country.
Demand for portable computers is sharply rising, as the cost of accessing 3G internet continues to go down due to the strong competition between mobile operators in South Africa. Mobile operators in South Africa have been on a mission to retain and gain market share, and one way to achieve this has been through offering cheaper data to contract customers, whilst pre-paid customers pay a relatively higher rate to buy 3G data. Leading mobile operators, which include Vodacom, MTN and Cell C, have also been offering deals which provide customers with portable computers together with data bundles which consumers can pay for over an average period of 24 months.
Acer Africa led computers and peripherals in 2013 with a 19% volume share. Acer has managed to consolidate sales through providing multiple price options for its products in both laptops and desktops, whereby high volumes are sold at low prices to individuals, whilst businesses prefer computers which have more processing power, and these products usually have high prices.
Overall volume sales of computers and peripherals are expected to see higher growth over the forecast period. Volume growth is expected to be driven by tablets and other portable computers, as cheaper products are expected to enter the South African market. Volume sales of tablets in South Africa increased significantly soon after the introduction of cheaper tablets, and this trend is likely to continue over the forecast period.
Consumers in South Africa are increasingly spoilt for choice, as sales of smartphones continue to grow in South Africa. More consumers are substituting cameras with smartphones, which now come with multiple features, including high-quality cameras for both images and videos. The overall result has been a general decline in volume growth for imaging devices in South Africa.
Imaging devices is expected to see a further decline in retail volume sales over the forecast period, as the category continues to lose share to substitute products such as smartphones, which is expected to see remarkable volume growth over the forecast period