The technology and durables (T&D) market experienced flat growth in 2024, with South African consumers spending nearly R90 billion in this category and sales value increasing only 1.8% from 2023.
This is according to NIQ South Africa’s State of the Retail Nation data for the last quarter and full year 2024, released today.
The analysis, which tracks sales from the T&D and fast-moving consumer goods (FMCG) markets, shows a moderate increase in retail sales last year, despite a strong festive season finish.
GfK and NielsenIQ completed their merger in December 2023 to form NIQ South Africa.
The T&D market includes mobile phones, washers, dryers, refrigerators, air-conditioners, computers, televisions, information communication technology equipment and vehicles.
According to the analysis, overall performance of the T&D market was dragged down by a 2% decline in sales value in telecoms, the biggest T&D category, representing more than half of the market’s value.
With sluggish smartphone sales, a surge in Black Friday spending wasn’t enough to turn around a disappointing year for the T&D sector.
Although the IT (up 7%), major domestic appliances (up 10%) and small domestic appliances (up 9%) segments showed strong growth, this could not compensate for the negative growth in the telecoms segment, notes the analysis.
“The telecoms category, which represents 53% of the total sales value in the South African T&D market, showed negative growth (down 2%) due to market saturation and slower smartphone upgrade cycles. Consumer electronics (including TVs) was flat. The telecoms market experienced negative growth in value and flat growth in units, as 3G phones continued to be phased out,” it states.
According to NIQ South Africa, the telecoms market is still stratified, with 5G phones being 55 times more expensive than 2G phones, while 4G handsets are now the standard, making up over 60% of unit sales.
Prices decreased by 9% during the fourth quarter, compared to the previous year, with consumers benefitting from wider discounting and aggressive competition from emerging Chinese phone brands.
Meanwhile, the T&D market enjoyed its biggest Black Friday to date, shows the analysis. Consumers took advantage of discounts, with prices down by around 5%, unit sales up 12% and sales value up 7% compared to Black Friday 2023.
Thomas Woods, market intelligence lead for NIQ in South Africa, notes: “Online T&D sales grew 9% for the year, outpacing the broader market, as consumers increasingly sought better deals online.”
Discounts in T&D were lower, but more widespread than in previous years. Fiercer price competition and aggressive discounting continue to suppress growth in the FMCG and T&D segments alike, says Zak Haeri, MD of NIQ in South Africa.
“Despite much-improved consumer sentiment off the back of lower levels of load-shedding, social grant increases and slower price increases, retail recorded only moderate gains in sales during 2024. High unemployment and rising living costs continue to challenge many households, with consumers seeking value when they shop.”
Share