When it comes to their technology purchases, Australians appear to have shrugged off the economic gloom in the second half of 2008 (2H 2008), according to figures from the latest Canon Consumer Digital Lifestyle Index (CDLI). The Canon CDLI is independent research commissioned by Canon and compiled by GfK using information on sales figures (units and dollar value) provided by GfK’s retail audit panel.
Testimony to the growing importance of digital technology in Australians’ lives, spending on consumer electronics products in 2H 2008 reached a massive $3.3 billion – the highest half-year result recorded since the Canon CDLI commenced reporting in 2003.
“In light of the emerging financial crisis, it’s very encouraging to see the Australian technology industry continuing to record such strong growth, outperforming the retail sector as a whole,” said Darren Ryan, General Manager – Marketing, Consumer Imaging Products Group, Canon Australia. “Digital technology is now a centrepiece of the Australian lifestyle and we’re seeing this in both the sales figures and in the way consumers actively engage with the technology in their leisure pursuits.”
Sales during 2H 2008 of the digital lifestyle products covered in the Canon CDLI*1 soared by 20% to 8.47 million units, while the industry revenue generated by the Canon CDLI categories increased by 14% to $3.296 billion. Total sales for the Canon CDLI product categories grew several times faster than for the retailing industry as a whole. Total sales for the entire retail sector*2 grew by 3.3% over the year (from Q4 2007 to Q4 2008), whereas total Canon CDLI sales revenues grew by 10.1% over the same period.
Categories that defied the economic downturn were digital still cameras, games consoles, digital media players and flat screen TVs. Digital still cameras continued to be a star performer in 2H 2008, with unit sales up 317,000 or an astounding 23% compared with the same period a year ago. In volume terms, digital still cameras were the second largest category in this report, just behind digital media players, reflecting the growing importance and integration of digital imaging in Australian consumers’ lives.
“Despite the high penetration of digital still cameras*3, Australians bought more than 2.6 million units last year, taking advantage of outstanding consumer value available in the market to upgrade to the latest technology,” said Ryan. “We’re seeing a creative revolution taking place in the market with consumers upgrading to more advanced compact camera models and explosive growth in digital SLR camera sales*4 of 83% in the fourth quarter and 52% for the full year. Australians have also demonstrated their attachment to imagery through the upward trend in the number of pictures taken each month.”
According to Ryan, 2009 holds plenty of promise for the Australian technology sector despite the generally negative economic sentiment being reported: “Performance so far this year leaves us feeling optimistic about 2009, and we expect this trend of year-on-year growth to continue. Digital SLR cameras in particular are achieving very strong growth despite the economic uncertainty, so we’re confident that we’ll close out the year in positive territory as a business.”
· Product categories with the highest market size by value are:
o LCD televisions (32.1 percent of total Canon CDLI sales)
o Plasma televisions (16.9%)
o Game consoles (15%)
o Digital still cameras (12.7%)
o Digital media players (9.9%)
· DVD players, DVD recorders, (single function) inkjet printers and photo printers all declined in both volume and value terms.
· Average selling prices fell in 9 of the 11 product categories covered by the Canon CDLI (by around 8% on average from Q4 in 2007 to the same period in 2008), delivering both a challenge and an opportunity to players in the Australian consumer electronics industry.
· Lower selling prices reduced the overall rate of revenue growth for the Canon CDLI product categories. Total sales in the second half of 2008 increased by $404 million (+14%) on the previous corresponding period, whereas the growth rate was 17% a year earlier (from 2H 2006 to 2H 2007). This slowing of growth represents a clear challenge to the consumer electronics industry to find ways to innovate and stimulate sales growth in 2009.
· While lower selling prices made digital technology more accessible and propped up sales volumes, a fair proportion of the money saved by Australian consumers seemed to go towards the purchase of value-added items. For example, along with their digital cameras, around 62% of recent camera buyers bought additional items such as memory cards, camera bags, extra batteries, tripods, flashes and/or additional lenses. Buying patterns such as these represent an opportunity for retailers to simultaneously add value and minimise commoditisation through creative product packaging (i.e. bundling), cross-selling and up-selling.
1 Source: Australian Bureau of Statistics Cat. No. 8501.0 – Retail Trade, Australia, December 2008, seasonally adjusted.
2 CDLI categories: Digital still cameras, digital camcorders, inkjet printers, photo printers, multi-function devices, plasma TVs, LCD TVs, DVD players and recorders, digital media players and games consoles.
3 Around 65% of Australians own a digital still camera. Source: GfK Retail and Technology.
4 Source: GfK Retail and Technology. Digital SLR unit volumes in 2008 were up 52% on 2007. Digital SLR unit volumes in Q4 2008 were up 83% on Q4 2007.
Canon Australia is a leading provider of advanced, simple-to-use imaging solutions for businesses and consumers. Canon’s Australian R&D company, CiSRA, develops customised solutions for local customers, and exports digital imaging technologies for use in Canon products worldwide. Canon has ranked among the top-three US patent recipients for the past 17 years, and had global revenues of around $US45 billion in 2008. Canon Australia also operates Canon Finance Australia, which offers one-stop shopping for customers wanting leasing or finance services. For more information, visit canon.com.au