Smartphones a Recession Beater in Asia

Consumer confidence remains tepid in Asia, even as most of the region slowly makes the transition from recession to recovery. However, the latest data from GfK Asia shows there are pockets of optimism - led by surging demand for smartphones.

According to GfK Market Insight Asia the overall retail market for consumer technology performed poorly in the first half of 2009, recording a drop of 18% in value compared with the same period last year. Overall sales volume managed an approximate 2% growth, made possible by the 7% growth in the mobile phone sector.

GfK Market Insight Asia tracked retail technology trends in Hong Kong, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

The stand-out performer in the market was the smartphone, with sales increasing 142% across the region.

"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. 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," said Frans Janssen, Managing Director, GfK Asia.

"Smartphones led the pack in the Asian retail technology market for the 1st half of the year. In Hong Kong, four out of every 10 phones sold is now a smartphone. And in Korea, smartphones had a zero market share in the first half of last year, and this year they had 30% of the market.

"From January to June 2009, smartphone sales value in Thailand increased by 152% over the same period in 2008, even as the overall value of retail technology sales dropped 7.4%. Smartphones have almost tripled their market share among telecom products to 10.3% from 3.5%."

Other segments that performed well in their markets include Mobile computers (portable PC), 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% 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%, after slashing the price of units by almost 50%. In contrast, sales of rival LCD TVs increased only 2.6% and the value of sales plunged 22%.

Posted to the site on 7th August 2009