Consumer electronic market in Poland worth EUR5.5bn

5 Oct 2012

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The financial crisis has negatively influenced the value of the home appliances, drugstore consumer electronics and digital media retail market. It is only in the last year that we have seen the first signs of recovery, even though it was an increase of only 0.8%. As a result, based on PMR estimates included in the report ?Retail market of home appliances, consumer electronics and digital media in Poland 2012. Market analysis and development forecasts for 2012-2014?, the market was valued at PLN 23.7bn (EUR5.5bn). In addition, the share of the store chains network is growing and it currently generates almost 70% of market sales.

The financial crisis brought about a considerable decline in the value of the home appliances, consumer electronics and digital media market in Poland, which was growing at a double-digit rate as recently as in 2008. Over the following two years, the market has seen a noticeable correction due to significantly stricter bank loan policies. This applied to both consumer loans, which affected all segments, and mortgages which decelerated the housing market and thus, decreased demand especially for large home appliances.

The financial crisis also had a negative influence on consumers, who are more cautious when buying a given product, are more price sensitive and less likely to make impulse purchases, and need more time when deciding on the purchase. On the other hand, customers frequently buy home appliances, consumer electronics and digital media to compensate for not making larger purchases or lack of holiday trips. Additionally, in 2010, the aircraft crash in Smolensk, killing the Poland?s President and many of the nation?s leaders, reduced sales for the following several weeks.

First signs of recovery could be noticed in 2011 and were caused primarily by a low base effect as well as by the improving public mood. However, at 0.8%, growth was not significant and the market was valued at PLN 23.7bn. This was also due to the negative economic news from international markets, and brought about purchases in the final months of 2010, prior to the 2011 rise in VAT. A positive impact on the market is also the switch-off of the analogue TV signal as it triggers purchases of modern TV sets or decoders.

Chain stores generate almost 70% of the market value. This is one of the most consolidated channels where ten largest retailers generate two-thirds of the market sales value. At 16%, the internet sales channel is also very strong. It involves sales through online platforms, including Allegro, which is the largest online auction site, as well as via internet shops, also those operated by the largest chains. The remaining share of the market belongs to hypermarkets, supermarkets and discount stores, independent stores and outdoor markets.

Among the industry boosters in 2012 is the switch off of the analogue TV signal. Additionally, the Euro 2012 Football Championship and the 2012 Summer Olympic Games in London have had a positive impact on purchases of television sets. Furthermore, sales of smartphones and tablets are also growing year by year. This will lead to an increase in the market growth rate to over 4% by the end of the year.

Even though PMR expect the economy to slow down in 2013, there will still be a few positive factors influencing the home appliances, consumer electronics and digital media market. These will include the ongoing trend of TV set replacement or decoder purchases, the expansion of retail chains, increasing competition between online and offline retail outlets as well as the improved loan availability to those people who have paid off loans drawn before the crisis. Thanks to this, the value of the market in Poland is not likely to decrease.

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