South Africa remains a ready market for top-of-the-range products, even if these do not appeal to the mass market. Michael van Lier, consumer electronics director at Samsung South Africa, says the TV market is a powerful indicator of this demand.
“For the past decade [Samsung] sales have averaged one million TVs annually, [with a combined value] just short of R8bn,” he said. One of these sells for a cool R1m.
“Of this number, 10% in value comes from TVs priced at R25,000 and up, and 3% in value is made up of units priced at R42,000 and higher.” One of the most expensive gadgets on the Just say no to meetings, Shopify tells e mployees the Samsung Neo QLED 4K QN90, selling at R150,000 on a promotional discount, is a popular choice.
Van Lier says it has a very specific value proposition. “It is differentiated from other TVs in the market as it delivers a superior gaming experience, which is made possible by its Neo Quantum Processor. The picture quality is brilliant in every scene you watch due to Quantum Matrix technology, which allows for ultra-fine light control.
“Sound experience is also enhanced with the benefit of Dolby Atmos. Thanks to Samsung SmartThings, our Neo QLED models also offer customers a smarter connected living home experience.” The most expensive TV from Samsung is the 98-inch 4K, which retails at R199,000. It is also available in an 8K model, but only on special order, selling for a cool R1m. And it does sell.
“We saw an impressive uptake in 2022,” says Van Lier. “In 2023, we are going even bigger and are excited for our local introduction of a best-in-class technology called Micro-LED, which will be launched in the first quarter of 2023.
We will stock a 110-inch model, which will retail at R1.5m. However, there is also a 126-inch model which will retail at R3m.” This showstopper, he says, will also be available only on special order. Samsung also sees continued demand for its high-end smartphones.
The consumer electronics industry is expected to hold steady in 2023, with South Africa and the rest of the continent also expected to maintain sales levels seen in the past year. “After a difficult year, expectations for 2023 are more positive,” says Ines Haaga, director for consumer technology and durables (T&D) at GfK, a worldwide consumer data company.
“GfK forecasts a stabilisation of the global revenue growth within the T&D market, standing in the low single digits.”
Africa and the Middle East reported sales in the category of $44bn (about R760bn) for the first 10 months of 2022, a 0.1% increase over the same period a year earlier — a strong performance, given recessionary trends around the world and the strength of the dollar relative to local currencies.
The growth is driven by a continued consumer appetite for hi-tech gadgetry, but with an emphasis on lower cost. In Europe, the Middle East and Africa, premium brands saw an 11% fall last year, GfK, says.
According to Justin Hume, vice-president for mobile at Samsung South Africa, the Ultra Premium market, which it defines as handsets costing more than $1,000, grew by 5% in January to September last year over the same period in 2021, to 422,000 units. In what Samsung calls the combined flagship segment, phones costing more than $600, the Ultra-Premium phones represented 65% of total unit sales.
The Ultra-Premium market is expected to continue to grow by 8% in 2023 ... During these times of economic headwinds, the higher net worth market segment maintains credit worthiness with mobile operators [with] sustained upgrading
— Justin Hume, vice-president for mobile at Samsung South Africa
“The Ultra-Premium market is expected to continue to grow by 8% in 2023,” says Hume. “During these times of economic headwinds, the higher net worth market segment maintains credit worthiness with mobile operators [with] sustained upgrading.”
A case in point is the current Samsung flagship range, the S22, which comprises a basic model, a Plus and an Ultra, ranging from R19,000 for the S22 to R29,000 for the Ultra.
“In 2022, the S22 Ultra accounted for 56% of the S22 Series, showing the demand for higher specification devices, particularly driven by the S-Pen function and powerful camera functionality,” says Hume.
“Additionally, our fourth-generation Foldable series continued to find a growing audience who identify with both compactability and functionality.”
At the other end of the scale, affordability and hi-tech are becoming a major driver of sales. TCL, the world’s third-biggest TV manufacturer after Samsung and LG, has made a strong foray into its own branded low-cost smartphones after years of manufacturing them for the likes of Alcatel.
Last year it launched one of the lowest cost 5G phones in South Africa, the TCL 20R 5G, retailing at R3,899. Sales figures aren’t in, says Ernst Wittmann, TCL Communication regional manager for Southern and East Africa, but the trends are clear. “We can confidently say that consumers are doing their homework and the affordability factor is more key than ever before.
“Affordable hi-tech devices will be in demand in the future as consumers become more cautious with their spending, which will see more opportunities for all manufacturers.
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