Photo - Selinna Chin, General Manager of GfK Malaysia
According to the TEMAX (Technical Market Index) Malaysia report for the first nine months of the year, the Technical Consumer Goods (TCG) industry in Malaysia expanded by about 19 percent over the same period last year, rendering the country the highest growth market in the ASEAN region amongst all the countries tracked, including Singapore, Malaysia, Thailand, Indonesia and Vietnam.
Consumer Electronics is one of the seven key sectors contributing to the good performance of the overall TCG market in Malaysia, recording a nominal 1 percent YTD (year-to-date) growth over the same period in 2011 and has shown 6 percent growth from quarter two.
Although most products within the CE sector declined in sales in the third quarter of 2012 against the same quarter a year ago, the largest segment in this market, the LCD-TV, managed to gather almost 8 percent increase in sales compared to last quarter. In ASEAN, the other growth market for CE is Indonesia which garnered a whopping 21 percent increment in sales during the first 9 months of the year.
The market in 2012 for Telecommunication in Malaysia and elsewhere in the region has been largely very positive; with three out of the five ASEAN markets tracked reporting robust double digit growth in the first three quarters, mainly driven by strong smartphone sales. Particularly Malaysia, high growth of smartphone is very much stimulated by growing mobile data use with higher subsidies by the operators on certain major smartphone models launched in 2012.
Convenience, portability, and connectivity take centre stage in today's fast pace society where mobile Internet devices such as laptops and tablets continue to see surge in demand and experience exponential growth. Overall IT sector in Malaysia grew 14 percent, driven by strong sales of tablets and communication devices which grew by double digits as consumers acquired their second or third devices.
During 2012, the 'highs' across the region are that developing markets are still in the process of transitioning to more advanced TV technology. For instance, demand for LED, 3D and smart TV features are on the rise in Malaysia, contributed by falling prices to a certain extent. For instance, a 40 inch LED cost RM2,900 (US$954) a year ago but for the same screen size is now priced at RM2,000 (US$658). A 40 inch 3D TV cost RM 3800 (US$1,250) a year ago but now only at RM2900 (US$954).
The region's consumers are also hungrily adopting the latest smartphones and tablet, as evident from the increasing sales of these two products. At the same time, multi-functional devices such as smart mobile phones and tablets are cannibalising posing challenges to various CE products with dedicated functions, such as portable media players and camcorders.
The sophistication in technology and wide array of features available in smartphones and tablets can rival the features and even price found in portable media players and camcorders. Feature phones continue on its downtrend at the expense of high adoption rate of the more high-tech smartphones.
Malaysia's reliance on trade from advance economies reduced
The region's TCG sector generally experienced growth in the range of 1 to 19 percent in revenue terms, and quarter four performance will largely be driven by discounts, promotions and festive shopping in the last month of the year. Continued spending by consumers on the IT and Telco sectors will still keep on fueling the growth of the overall industry.
The global as well as internal environment plays a vital role influencing how products perform in any market. In spite of the fact that Malaysia's reliance on trade with advanced economies including the EU, is now much smaller than before, the challenging external environment has definitely left an impact on consumer spending in Malaysia.
Any changes in ruling parties or government policies, globally or locally would have psychological impact to hold or have a wait-and-see purchasing decision, especially in the retail industry.
Hence because of the uncertainty people are not willing to risk their money/invest but instead are holding back on their spending power.
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