The global economy has been regularly tested by the tribulations of 2023; and 2024 finds it navigating a maze of economic uncertainties, global conflicts, fragile geopolitics, and economic headwinds. Notable amongst these is the slowdown in the Chinese economy and repercussions from monetary policy tightening.
Despite these challenges, the potential for growth and opportunities remains, albeit amidst cautious optimism. In late January, the International Monetary Fund further revised its global GDP projection to 3.1% in 2024, up from 3% in 2023, indicating an improving outlook. Yet, it is imperative to recognize that some markets and categories are bolstering this global growth above others. In the face of this, brands must harness data and insights at a granular level, to uncover and capitalize on opportunities and find viable paths for growth.
The Technical Consumer Goods (TCG) market presents a nuanced picture. The overall market showed signs of a recovery for the full year 2023 – declining only –2.9% compared to 2022. Although this is a decline, it still indicates an improving market picture towards the end of the year. Despite these signs of stabilization, it faces numerous challenges due to economic uncertainty.
Consumers are still rationalizing purchases with their spending and favoring necessary and well-thought-out purchases over aspirational upgrades. However, certain categories, like IT and small domestic appliances, have shown more resilience and growth than other sectors. This indicates that strategic, innovative approaches and a strong understanding of consumer behavior can unlock opportunities even in 2024’s tough market.
Consumer confidence, another vital metric, reflects the broader economic sentiment. With savings depleted and interest rates impacting household budgets, consumer confidence globally has been on a downward trend, emphasizing the need for brands to be sensitive to consumers’ evolving needs and financial constraints. But early indicators promise hope. Inflation is expected to drop again in 2024 and interest rates will reduce. The first positive signs are already being felt for the global Technical Consumer Goods market, as the single most important month of the year, November 2023, revealed a significant revenue growth of more than +5% vs same period last year- the strongest growth since January 2022. Furthermore, big events like the EURO cup 2024, Paris 2024 Summer Olympics and political elections are anticipated to inject a mix of emotions into consumer sentiment, potentially influencing spending behaviors.
For 2024, then, the tech and durables space is marked by opportunities as well as challenges.
- Affordability will be a key theme, with consumers seeking premium experiences at lower prices.
- Promotional activities, especially timed with major events, can give positive traction, and help move volumes. However, discounting activity is expected to be more moderate than that seen in 2023.
- The burgeoning field of AI offers promising avenues for brands to connect with consumers and to uncover innovations that are differentiating as well as being convincing, and that trigger purchases.
In conclusion, while 2024 may not promise an easy path, it does offer a landscape rich with potential for those ready to navigate its complexities.
For more information:
https://www.gfk.com/blog/understanding-market-dynamics-trends-future-outlook-2024
About
Based on a new partnership between GfK SE, gfu Consumer & Home Electronics GmbH and IFA Management GmbH, we are providing regular information on market developments and trends in the consumer electronics and home appliances industry. Interesting insights, current market figures, consumer trends and much more will be professionally prepared for you from the sources of the three expert partners.