Why and how should you invest in Consumer Electronics Retailing?

Part 1: What is the trend of Consumer Electronics Retailing?

With the development of technology and an increase GDP per capita, the electronics retail industry has been growing dramatically, with an estimated 445 million products sold by the end of this year, estimated that the annual growth rate of 3% .

There will be 3 types of products which consist of

  • Housewares (or White goods because mostly white): TVs, refrigerators, air conditioners, etc.
  • Small household items: tableware like microwave ovens, coffee makers, blender, etc.
  • Consumer electronics: computers, iPhones, iPads, etc.

To learn about this industry, we can dive into some of the following aspects:

1. Industry characteristics

a / The industry trend

  • Continuous growth, focusing on household appliances and consumer electronics
  • Specialized store is the best sales channel
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  • Asia dominates the world for the growth rate
  • Offline to online channel or Omnichannel

E.g:

  • ECommerce will to be the fastest growing distribution channel between now and 2022, with online growth rates running at 12 percent, almost three times the rate of in-store sales growth.
  • Today about €8 billion a year, or 20%, of European home appliance sales come from the online channel. This saw a major boost in the first half of 2016 when online sales made up almost 35 percent in countries such as the UK and the Czech Republic.
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  • Mobile channel grows powerfully
  • Continuing margin erosion due to commoditization of category (except Apple products) because of product proliferation and product cycle time compression.
  • Moving their revenue mix from lower-margin items such as notebook PCs and TVs, to higher-margin products like smartphones and tablets.
  • Zero-interest EMI equated monthly installment
  • Cross-sales: furniture, etc
  • Upsale with Other service: warranties, repair
  • Social purchasing experience
  • The Emerge of Facebook, Twitter and especially Instagram
  • Instagram to reach a younger audience
  • Increase of client’s awareness of product and price
  • engage in instant feedback and rapid price-comparison amongst websites
  • Easily browse website or 3rd party intermediary to find products info

(To be continued..)

Based on all current trends of this industry, let’s discover the competitive aspects and a few benchmarks in consumer electronic retailing. Meanwhile, you can check a few financial ratios in your business and wait for next article 🙂

Emmy Le
Author:
A tech-lover and a data-driven business consultant who deploys disruptive innovations to Magento retailers in Omnichannel Age

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