Goods have aged, replacement has accelerated

The electronics sector has been extraordinarily dynamic over the last two years. The realization of postponed purchase has resulted in records being broken in many products. There have been major increases in penetration in products such as mobile telephones, DVD players, computers, digital cameras and kettles. The results of ACNielsen’s “Consumer Durables Survey” set out in figures the extent of this significant change. The results of the survey also show that this boom will continue for the next two years.

In recent years electronics has become one of the boom sectors. During the years of the crisis almost nothing was moving on the market but it has really picked up in the last two years. The realization of postponed purchases has produced a virtual explosion in sales. The penetration rates in some products have risen to unprecedented levels. In many products the emphasis has now sifted to replacement purchases.

The Consumer Durables Survey by ACNielsen, which is one of the world’s leading research companies, clearly illustrates these developments. The survey has been carried out at intervals since 1998 and the results for 2005 show that there have been important changes since 2003. The most obvious of these is that mobile telephones have now joined the ranks of essential  goods such as televisions and refrigerators. The improvement in the economy has produced a parallel rise in demand for technological appliances such as DVD players and digital cameras. Perhaps the most important result of the survey is that it provides evidence that the interest in electronic goods is going to continue over the next two years.

Mobile telephones on the rise
Ten years ago most of us had yet to become acquainted with mobile telephones. But everything has changed as a result of the rapid decline in prices brought about by intensive marketing campaigns and competition. Today in Turkey there are very few people who do not own a mobile telephone.

The rate of mobile telephone penetration rose by 14 percentage points between 2003 and 2005. As a result mobile telephones have joined refrigerators, color TVs, irons, automatic washing machines and vacuum cleaners as products in which the penetration rate is over 75 percent.

The high rate of those who expect to buy or update their mobile telephones indicate that the market will remain dynamic in the years ahead. When one looks at the service providers of the participants in the survey, Turkcell is the leader with 65 percent. It is followed by Telsim with 16 percent and Avea with 13 percent.

DVD players have a great potential
In addition to mobile telephones, another product which is rapidly entering the lives of the Turkish consumer is the DVD player. DVD players have recorded a rise of 16 percent in the rate of penetration since 2003, the biggest increase amongst all the electronic goods. Factors which have fuelled this rise include incredible price reductions by the producers and the ease of payment facilities offering by hypermarkets and electronic retail outlets. The fact that penetration is still below 25 percent is also extremely important in demonstrating the future potential of the DVD market.

The rise of DVD players and mobile telephones demonstrates that interest in electronic appliances is continuing to increase. These two products whose penetration rates have risen the most compared with 2003 are followed by computers with an increase of 9 percent, digital cameras with 7 percent and video recorders with 4 percent. These five products will continue to perform strongly in the years ahead.

Experts say that the survey also shows that interest in these electronic goods will increase still further in the next two years.

Replacement having a major impact
Households have an average of 3.3 of the 8 products included in the electronics products group survey. The three products with the highest penetration rates are color televisions, mobile telephones and audio equipment.

Replacement purchases in electronics has made a noticeable contribution to the dynamism of the market. The rapid development of technology has meant that, within a very short space of time, products in various segments are being launched on the market with brand new features. Competition has meant that prices of new products are falling rapidly and replacement purchases are sustaining the boom.

The average life of electronic products is 4.7 years. This is 2.4 years for DVD players and mobile telephones, 2.7 years for digital cameras, 3.2 years for computers and 3.8 years for digital cameras.

At present 17.2 percent of those who own products are considering replacing them. For some electronics products, 14 percent of those who do not have them at the moment are thinking of buying them over the next two years. When one puts these two figures together, gives an even more clearer demonstration of the future potential of the electronics sector.

The demand for white goods will continue
The proportion of households which do not own white goods but whose members are thinking of buying them over the next two years stands at 10 percent. This rate is highest in Eastern and Southeastern Anatolia at 17 percent. As a result, even if product penetration reaches saturation point, the demand for white goods will continue in the years to come.

52 percent of consumers prefer to take advantage of distributor payment installment campaigns when buying white goods. 30 percent pay up front and 7 percent prefer installment payments by credit card.
Even though sales of white goods in outlets outside the distributor network are rising, most people still prefer to buy white goods from distributors. 53 percent of consumers made their most recent white goods purchase from distributors selling a single brand, while 19 percent opted for a distributor selling more than one brand.