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Smart phones push CE growth in Asia

Posted: 12 Aug 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Asia consumer market? smart phone? consumer electronics?

Even as consumer confidence remains tepid in Asia, the latest report from GfK Asia showed that there are pockets of optimism, led by the surging demand for smart phones.

The GfK Market Insight Asia tracks retail technology trends in Hong Kong, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam for 1H 09. The report offers detailed data based on retail sales of consumer electronics including audio home systems and TVs; home appliances, including washing machines and microwaves; photographic equipment; telecom equipment such as mobile and smart phones; and IT tools including desk and mobile computers.

According to the report, sales of smart phones increased 142 percent across the region. This resulted in overall sales volume growth in mobile phones of 7 percent in 1H 09, pushing the retail market in the region to grow 2 percent. This despite the poor overall retail market performance for 1H 09 of an 18 percent drop in value compared with 1H 08.

"Although this latest GfK Market Insight Asia report reflects slower than expected performance, the most successful manufacturers will still pull in sales at the retail cash register through marketing specials and providing the most up-to-date and sough after technology," commented Frans Janssen, managing director, GfK Asia. "As demonstrated consumer spending has been slowed by the ongoing recession, however there is still room for retail therapy. While it is true that consumers will look for good deals on electronic products and even wait for IT fairs to make purchases, there is proof that they are still making purchases."

Smart phones led the pack in Asia retail market in the first half of the year, Janssen said. "In Hong Kong, four out of every 10 phones sold is now a smart phone. And in Korea, smart phones had a zero market share in the first half of last year, and this year they had 30 percent of the market."

Janssen added that smart phone sales value in Thailand increased by 152 percent in 1H 09 over the same period in 2008, even as the overall value of retail technology sales slipped 7.4 percent. "Smart phones have almost tripled their market share among telecom products to 10.3 percent from 3.5 percent."

Other segments that performed well in their markets include mobile computers, which recorded double-digit unit growth in Hong Kong, Korea, Singapore and Vietnam. Mobile computers posted the highest unit growth among IT sales in Hong Kong. Vietnam retailers also saw mobile computer sales increase by more than 50 percent in the same period.

The growth of the retail technology sector in Singapore in the first half of June 2009 was discouraging. However, not all sectors of the technology sector performed poorly. Singapore retailers saw first-half sales of plasma TVs double, and sales value increase 9.4 percent, after slashing the price of units by almost 50 percent. In contrast, sales of rival LCD TVs increased only 2.6 percent and the value of sales plunged 22 percent.

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