South African tech stores are bouncing back from lockdown

GfK South Africa data shows that the South African technical consumer goods market’s revenue dropped by 7% between January and August 2020.

The country’s hard lockdown is the key reason for this decline, said GfK South Africa, as revenue for technical consumer goods dropped by 25% year-on-year between April and July 2020.

In contrast, January to March 2020 saw an increase in revenue of 1% for the same goods, which outperformed South Africa’s GDP growth of -0.1% for the same period.

Notably, August saw a major upswing in the technical goods market, as sales were up by 15% year-on-year – a good sign for the market moving forward.

Key to this August rebound were the following year-on-year increases in revenue:

  • Small domestic appliances – 37%
  • Office equipment and stationery – 83%
  • Major domestic appliances – 24%
  • Consumer electronics – 21%
  • IT products – 47%

Big growth in computing device market penetration

GfK South Africa also found that there has been a major increase in market penetration for popular computing devices between 2019 and today.

These increases in market penetration are as follows:

  • From 78% to 91% for smartphones
  • From 40% to 52% for laptops
  • From 36% to 39% for tablets
  • From 25% to 29% for gaming consoles

“Performance for content creation devices such as laptops and tablets was strong, since sharing a device between people in the household was not an option in a time of remote working and home schooling,” said GfK South Arica head of market insights Nicolet Pienaar.

“Many households needed to invest in a second device for the home to support remote working and online schooling.”

“The pandemic is also accelerating an already strong trend towards ‘hometainment’ with consumers staying home for safety and the ability to make sophisticated entertainment choices,” Pienaar added.

Based on surveys with South African retailers, Pienaar said these shops are expecting a rebound in the technical consumer goods market for the fourth quarter of 2020, and online shopping is expected to be the biggest winner.

“After a gruelling year that has hit many South Africans in the pocket, we’re expecting to see demand from two types of consumer over Black Friday: the reset spender, looking for genuine bargains after months of holding back, and the revenue spender: looking for deals that let them trade up to premium products,” said Pienaar.

“Retailers need a dual strategy that will enable them to capitalise on demand from both segments.”

Now read: Best Black Friday tech deals from Makro

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South African tech stores are bouncing back from lockdown