Sales of laptops and netbooks are holding up at South African retailers, despite the cash crunch many consumers are facing.
Jan Potgieter, CEO of Massmart subsidiary Massdiscounters, which is home to Game and Dion Wired, says the computer business is performing better than general merchandise.
He says low ownership levels within the market have driven this, as there are still a number of first-time buyers and low levels of inflation in the segment. “Generally, laptops are by far the biggest growth area and now account for the bulk of all sales within the sector,” Potgieter says.
Netbooks are also selling well, driven by the small size and light weight of the new product, and sales are expected to grow exponentially in the next year, says Potgieter.
Massdiscounters expects laptop and netbook sales to continue to grow, but desktop sales are expected to stabilise at current levels. “Dion Wired is still experiencing big growths at the upper end of the laptop market and the sale of desktop computers is now a non-existent category, except for specialised gaming PCs.
“The personal computer market remains buoyant, while the SOHO and corporate environment is very challenging,” says Potgieter. The company has also seen growth in storage, especially external hard drives, as people need more space to store music, movies and photos, he notes.
Quality
Furniture retailer JD Group is also seeing computer sales holding up at Incredible Connection and Hi-Fi Corporation, says David Hirsch, group executive of marketing and merchandise.
However, at Hi-Fi Corporation, consumers are looking for value on items such as notebooks, while at Incredible Connection the higher-end items are selling well, as people buy for quality and invest in brand names.
Hirsch says sales of netbooks are also doing well, and these are selling based on their size and convenience factor. Sales of Apple products have picked up compared to a year ago, and the more affordable pricing in storage has led to more sales in that segment, says Hirsch.
Sales of wireless keyboards and mice, however, have slowed, as these are not items that people need, but rather want and can delay purchasing, says Hirsch.
Gaming sales have also slowed down a bit and people are moving away from new entrants into the market, such as the PlayStation 3, in favour of the cheaper PlayStation 2, he adds.
Craig Ludwig, Woolworths' divisional director of general merchandise, says as a result of consumer demand, it has introduced a range of digital products in some stores. “With the increasing interest in digital products, for example in gifting, and in line with global trends, Woolworths has introduced a range of digital products in selected stores.”
Retail channel
Global research firm Gartner expects indirect PC sales to account for 80% of worldwide PC shipments by 2012. Direct market resellers will be the fastest-growing indirect sales channel, although the market size will be relatively small at less than 5% of the total market by 2012, says Gartner.
The indirect channel accounted for 66.6% of worldwide PC shipments in 2004, and it grew to account for 74.3% of shipments in 2008, due to emerging market expansion, adds Gartner.
Future growth in PC sales during the next four years will be fuelled by steady home market growth in both mature and emerging markets. However, Gartner says small and medium enterprises prefer a combination of both the direct and indirect sales channel when purchasing PCs.
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