The technical consumer goods experienced robust revenue growth of 17% in the year to October 2021, reaching US$726 billion (A$1 trillion), although unit sales only inched up 3% during the period, according to GfK data findings.

Wearables was the leading segment of the year, with revenue growth of 44% compared to the previous corresponding period.

“The increase in revenue for the year as a whole is due to the strong start. While the first few months of the year saw increased demand and immense growth, revenue steadily levelled off over the course of the year, hovering around 2020 levels and even below in some cases,” GfK expert on technical consumer goods, Jan Lorbach said.

Premiumisation and stay at home trend

The decline in overall demand in the technical consumer goods market during the year is primarily attributable to product groups with high household penetration, which at the same time have limited potential to grow further.

Televisions, for example, recorded an 11% drop in sales compared with the previous corresponding period from January to October. Despite weak demand, revenue for this product group remains at slightly positive levels, up around 11%. This means fewer units were purchased overall, but at a higher price point.

This is in contrast to product groups with a high potential to increase household penetration which saw significant growth, especially in the areas of home office, cleaning, or meal preparation. For example, global revenue of dishwashers increased by 22%, headsets increased by 27%, coffee and espresso machines increased by 23%, and notebook computers increased by 16% year-over-year from January to October 2021.

Online retail reaches its peak

Online retail benefited from the pandemic due to lockdowns and various other restrictions. During January to October 2021, it reached an average of 34% of total revenue worldwide, the highest level ever recorded.

Nevertheless, there was a slight saturation trend over the course of the year, not least due to relaxed restrictions and higher vaccination rates. While online sales still accounted for 41% of revenue in western Europe in May 2021, it declined slightly to 32% by October 2021, although remained significantly above pre-pandemic levels.

Health and sustainability

The pandemic has strongly focused consumer attention on health and hygiene topics. According to the global GfK Consumer Life study, 43% of people actively searched for products and services that help them lead a healthy lifestyle last year. This is reflected in sales figures for technical consumer goods including the wearables segment, which includes smartwatches or fitness trackers, which increased its revenue by 44%.

The topic of sustainability also gained a higher priority for consumers and the importance of this topic is reflected, for example, in sales figures for tyres. Although tyres manufactured specifically for electric cars are still a niche market, sales have already risen by 35% in western Europe alone from January to October 2021, in line with the number of new registrations of electric vehicles.

In the electrical appliances segment, the topic of sustainability primarily includes the energy efficiency classes that were newly defined by the EU at the beginning of the year. New energy labels were introduced for more uniform standards and greater efficiency, for example for washing machines, refrigerators or dishwashers, and the criteria for achieving the new levels A (highest efficiency) to G (lowest efficiency) were adjusted.

Outlook 2022

The past two years of the pandemic have shown how quickly forecasts can change so it is important for companies to have current information and data that can adequately respond to rapidly changing dynamics.  

In addition to the ongoing pandemic, the Football World Cup in Qatar in November 2022 will have an impact on the technical consumer goods market. According to the forecast of GfK experts, an increase in sales of TVs is to be expected as the event draws closer. The challenge will be to convert increasing demand into actual revenue, as the World Cup will coincide with promotions generally associated with Q4 and holiday season.

Overall, GfK forecasts further growth in revenue for the technical consumer goods market in 2022. Trends such as health and sustainability, but also premiumisation, will continue, which means retailers and manufacturers will have to adapt their product portfolio in the medium and long term to satisfy both new and existing customers.