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Consumer Electronics – Industry Analysis
The global consumer electronics market contracted from 2011 to 2013 and has performed poorly in recent years in most regions throughout the world with the exception of some. In general, consumer electronics are deemed as a non-essential item and is sacrificed at the cost of more essential items in times of austerity. However, the market has had some form of redemption from a strong performance from countries within emerging markets such as China and India leading the way. With the economy turning the corner, the consumer electronics market will recover at a moderate rate with new concepts and products being the main driver along with the eventual recovery of the more mature economies.
The global consumer electronics market had total revenues of $253.9bn in 2013, representing a compound annual growth rate (CAGR) of 0.8% between 2009 and 2013.
The Eastern European markets showed particularly strong growth with CAGRs of 8.5% in comparison to Western Europe which showed strong decline with compound annual rates of change (CARCs) of -7.8% over the same period.
The United States had the largest consumer electronic retail market in the world with revenues of $90.5bn in 2013.
The consumer electronics market is ever-evolving with new products being made available on a frequent basis. Also, the evolution of existing products serves to re-invent what is an already fully functional product and gives the consumer the feeling that new technology is the new norm. For example, televisions are entering a new era with the unveiling of the new ‘curved’ television which gives the viewer a more ‘immersive experience’. This may re-invigorate what may be considered a stagnating segment within the consumer electronics market and lead to an increase in revenues.
Another interesting development within the market is the re-introduction of game consoles in China. In 2000, the Chinese government placed a ban on the sale of foreign game consoles due to their perception on the effect they have on the mental health of young people. The ban was finally lifted in 2014 which means that retailers have the opportunity to enter a market which was not previously an option and will also have an overall positive effect on the consumer electronics market as a whole.
Online retailing is also a major trend which is becoming more prevalent within the industry. Consumer electronics were traditionally purchased within electrical retailer showrooms so that the consumer would have the opportunity to try the product before purchase. However, some retailers have struggled to ‘close the deal’ with sites such as Amazon being able to offer the same product at a significantly lower price. In recent years, traditional retailers have struggled with this threat of competition and have led to them placing higher importance on their own online arm.
For related Industry Analysis, please explore our range of Consumer Electronics Industry Profiles