1st quarter Balance report
IT category stands out in market growth
Cost management is critical for industry and retail.
by Leda Cavalcanti
The IT segment continues to stand out in consumer electronics units sold in the first five months of 2021. “The market breathes an important movement in the category, whose prices increased by 15% over 2020. It is on top of this number that the market grows in 2021”, says Ricardo Moura, head MI of the research company GfK.
Today, the market coexists with factors such as unemployment, which affects almost 15% of the country’s population, cost management and vaccination uncertainty. The categories grow in price and, consequently, in revenue. “The resumption of sales in units has not yet arrived. There is an evaluation of premium x cost-effective products and the need for discounts”, says the director of retail services, Fernando Baialuna.
From the first week of 2021 to mid-year, all consumer electronics categories grew in price and revenue. As brands are working with discounts, there is a migration of technologies to benefit the final products prices. This also opens up space for companies that are entering the market with mid-priced products and without state-of-the-art technology.
Caution in 2021
This is a year of great attention and care for companies, says Ricardo. “The market is growing in terms of revenues, but manufacturers, who have to generate demand need to be careful with the transfer of costs. Negotiations are fierce, there is a lack of inputs and there is no room for errors, especially in the case of the mix. It is necessary to have cash flow”, says Ricardo. “The time is for caution, almost like a wait time,” adds Fernando.
It is important to remember that the Brazilian economy has its peculiarities, among them the fact that it has a high share of informal workers, in the service and labor sectors, whose work became scarce with the pandemic; they contribute to injecting money in the market.
“The discount can be an alternative to seek sales conversion. However, the discussion is the question of the profit margin. The costs influence the price structure.” (Fernando Baialuna)
The scenario is challenging and requires planning as the market depends on matters related to income generation. The economy, in turn, remains timid and affects consumer optimism. It should not be forgotten that, in order to buy, the consumer needs more positive elements, such as the advance of vaccination and the creation of jobs.
Second Semester
“The market is growing in terms of revenues, but manufacturers, who have to generate demand need to be careful with the transfer of costs. Negotiations are fierce, there is a lack of inputs and there is no room for errors, especially in the case of the mix. It is necessary to have cash flow” (Ricardo Moura)
The projection is more conservative because there are a series of problems that need to be resolved, including inputs availability, supply chain management and delays in imports and in the vaccination schedule. “If everything goes as planned with the vaccination, the market will start to improve. We will start a positive recovery”, explains Ricardo.
The discount offer strategies, which took effect last year and is being resumed, is directly linked to the market movement, says Fernando. “The discount can be an alternative to seek sales conversion. However, the discussion is the question of the profit margin. The costs influence the price structure.”
Industry and retail have been discussing how to offer discounts and to maintain greater profitability at the present time. According to the directors of GfK, there is a result within expectations, that there is an increase in sales and in revenue, supported by the rise in the average price of all products.
Source: Eletrolar News #143
