GfK Marketing Services Japan Ltd (GfK Japan) announced the results of its survey on sales trends of home appliances and information technology (IT) devices in Japan in 2008.
The company conducts surveys on home appliances, cameras and IT devices, primarily with the help of volume retailers in Japan.
Domestic sales of home appliances and IT devices are likely to grow only 1% year-on-year (YoY) to ¥7.6 trillion (approx US$78.5 billion) in fiscal 2008 ending March 2009.
Following the sharp downturn triggered by the burst of the IT bubble economy, the Japanese home appliance market favorably grew from fiscal 2004, exhibiting significant YoY growth of 4.9% in fiscal 2007. However, the market struggled to expand further due to the economic degradation and the weaker consumer sentiment in fiscal 2008.
Amid such circumstances, sales of flat panel TVs and Blu-ray Disc recorders expanded favorably. TV sales rose 10% YoY to 10.31 million units in 2008, surpassing 10 million threshold for the first time in seven years since hitting 10.38 million units in 2001, GfK Japan said.
LCD TV sales surged in particular, increasing 20% YoY to 9.06 million units or rising 8% YoY on a value basis. PDP TV sales climbed 8% YoY to 1.01 million units in 2008 although they slowed slightly in the second half. On a value basis, however, PDP TV sales decreased 7% YoY due to the drop in the average selling price.
As well evidenced by the fact that flat panel TVs accounted for 97.7% of all TV sales in 2008, "The TV market has completely shifted to flat panel TVs," GfK Japan said.
Sales of Blu-ray Disc recorders, which sold as well as flat panel TVs, reached 1.34 million units, rapidly expanding from the preceding year's 160,000 units. Compared with total sales of DVD players/recorders and Blu-ray Disc recorders, which edged down 0.1% YoY to 7.15 million units in 2008, the numbers reflect the fact that the DVD market is shifting to Blu-ray Disc.
Pressured by Blu-ray Disc recorders, DVD recorder sales declined sharply by 27.6% YoY to 2.24 million units. In the video recorder market, the share of Blu-ray Disc recorders expanded to 37% on a volume basis and 53% on a value basis. In the 2008 year-end sales season, in particular, the growth of Blu-ray Disc recorder market share accelerated to 62% on a volume basis and 75% on a value basis, according to GfK Japan.
PC, digicam sales drop YoY
Meanwhile, PCs and digital cameras saw sales value fall YoY due to decreased average unit prices. The PC market inched up 2% YoY to 13.98 million units but shrank YoY on a value basis in 2008.
On a unit basis, the consumer market offset sluggish sales in the business user market. Sales of PCs for consumers grew 8% YoY to 5.22 million units. In particular, notebook PC sales increased notably by 14% YoY. Small, low-priced products called "net books" drove notebook PC sales. Their stake expanded to about 20% in the notebook PC market at the end of 2008, from only 2 to 3% as of the end of January 2008.
Sales of digital cameras decreased 0.9% YoY to 10.76 million units, a decline of 4.7% YoY on a value basis in 2008. Despite the favorable sales of SLR cameras, lower prices for compact cameras curtailed overall digital camera sales.
The mobile phone market also slumped with unit sales decreasing about 12 million units YoY to 39 million units in 2008. The market was hit by weakened demand for short-cycle replacement due to a new marketing method. GfK Japan expects the bleak environment to continue as long as the industry employs the current marketing system, which is preventing the replacement cycle from being shorter.
In terms of functions, 1seg tuners could be found in more handsets in 2008. Among the models sold in December 2008, about 80% supported 1seg capability. This trend promoted the use of larger displays as seen in the handsets sold in December 2008, 60% of which were equipped with a 3-inch or larger display.
Refrigerator sales increase due to higher unit prices
Among white goods, sales value rose more than sales volume as the ratio of luxury products expanded. Refrigerator sales slipped 3% YoY to 4.6 million units but increased 5% YoY on a value basis. Sales value rose aided by better energy efficiency and larger capacity in refrigerators, which aroused a certain level of demand for replacement and promoted consumers to choose higher-end models, GfK Japan said.
By item, refrigerator sales constituted the fourth largest 6.6% of overall home appliance sales, following TV sets (20.5%), PCs (12.3%) and air conditioners (7.8%).