Strong economy, fat bonuses expected to fuel Christmas sales
By ROLAND LIM
(SINGAPORE) This Christmas, Santa is expected to be going digital in a big way - boosting business for electronics vendors who are preparing for particularly strong demand for devices ranging from tiny MP3 players to big flat screen televisions.
This year's total spending on consumer electronics is expected to hit $1.25 billion, up some 9 per cent from last year, with a big boost coming from sales of flat screen TVs, says Gerard Tan, a director at market research house GfK Asia.
One of the retailers plugged in to the trend is Terry O'Connor, managing director of electronics superstore Courts, who says: 'Traditionally, we see a double-digit increase for festive sales based on a year-to-year comparison. Given that the economy is on an uptrend and consumers are enjoying good bonus payout, we expect this trend to continue.'
And the usual Christmas effect on sales could be added to by people buying big consumer items early so as to get in before the impending GST increase, he says.
Jimmy Fong, director of Apple retailer EpiCentre, who shares this view, reports that about 35 per cent of the business's annual revenue comes from the final quarter, with December being the month with the highest revenue. 'Consumers are generally more willing to spend during the year-end, mainly because many have received year-end bonuses - more this year as announced by the government to civil servants,' he says, adding that the festive season also leads consumers to be 'very open in spending their money during this period'.
Over at Canon Singapore, Andrew Koh, director and general manager of its consumer imaging and information division, also reports that the highest sales come in November and December.
Electronics vendors across Singapore are unanimous in their prediction that this year's hot item will be flat screen TVs, which are set to sell extremely well. Mr O'Connor says: 'The fast-selling items during the festive season include LCD TVs, notebooks, MP3 players, digital cameras and gaming products. This year, we expect to see a stronger consumer uptake for LCD TVs, particularly the high-end high-definition models. Convergent products such as PDA phones will also be hot sellers.'
GfK's Mr Tan agrees. 'Based on value, sales of LCD and plasma TVs in Singapore reached $369 million last year, and this is expected to grow by 30 per cent by the end of the year,' he says. 'The hype for flat screen TVs started from the World Cup and is expected to last till Christmas.' Their sales are likely to be helped by falling prices, he says.
Patrick Yau, an analyst at Macquarie Research, also places his bets on flat panel TVs to be a hot pick for this season, adding that gaming is also another area that will be popular. 'I don't remember in recent years, people queuing up for something like the Sony Playstation 3 (PS3) or the Nintendo Wii,' he says, referring to the latest game consoles which have been snapped up by fans soon after they were launched in the US. The two systems are yet to be released in Singapore.
He does have a few words of caution, though, saying: 'Manufacturers were a little less busy than usual in Q3 this year, so that indicates that their customers in turn had a bit more of a conservative outlook when they put through their orders back in July/August.'
But Scott Jewler, chief strategy officer at chip tester Stats ChipPac, says 'the broader consumer electronics and IT (manufacturing) demand remained relatively strong'. Stats ChipPac packages and tests chips used in consumer electronics such as flat panel TVs and game consoles.
At Panasonic a spokesperson says that, besides its flat panel plasma TVs, it also expects its digital still cameras to be hot sellers.
For Canon, Mr Koh says: 'We believe sales for this quarter will be stronger than the same quarter last year as the interest and demand for digital cameras is still very high and there are many consumers who are upgrading their digital cameras to higher megapixel models or to the digital single lens reflex (DSLR) models.'
GfK's Mr Tan adds: 'For MP3 players, the total market value last year was around $97 million, and this is expected to grow about 16 per cent to $113 million by end-2006.'
Besides the recently updated Apple iPod Nano and iPod Shuffle portable digital music players which are expected to be hot sellers, Epicentre's Mr Fong also noted that iPod accessories such as iPod cases and speakers have also been popular gifts.
Another fast-moving item for Santa's bag will be the perennially popular mobile phone. While vendors declined to provide figures, most, such as StarHub, report seeing higher sales in advance of this festive season.
And Christmas wouldn't be Christmas without shopping promotions. This year, more than 500 exhibitors are expected to plug their products at Sitex 2006, an annual IT and electronics fair organised by the Singapore infocomm Technology Federation, which will be held from Thursday Nov 30 to Sunday Dec 3 at Singapore Expo. Last year, some 632,500 visitors spent $18 million at the show.
Singapore's own Creative Technology started its year-end warehouse sale yesterday (which ends tomorrow) to hawk its array of digital entertainment products such as MP3 players and computer sound cards.
