Aussies spent $5B on digital devices in 07, market tainted

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Aussies spent $5B on digital devices in 07, market tainted

Canon has released the results of its Digital Lifestyle Index, revealing that a record $5 billion was spent on digital devices in Australia in 2007. However, questions have been raised as to whether the figures are truly reflective of a market tainted by grey market products.

According to the latest Canon Digital Lifestyle Index (CDLI) that monitors consumer spending on technologies such as TVs, Cameras, MP3 players and DVD recorders, 2007 witnessed record growth in the digital market.

“As Canon predicted, Australians spent a huge five billion dollars on digital devices last year, with the highest amount of spending occurring around the Christmas period,” said Stuart Poignand, marketing manager Consumer Imaging Products Group, Canon.

Canon claimed that despite expected economic decline and the threat of rising interest rate rises, the purchasing of digital technologies remained strong. Retailers argue, however, that the figures do not take into account products infiltrating the market from unofficial sources.

Colin Williamson, director, PHD Sites told CRN that while growth has been consistent for the last three to four years, differentiating between grey market products and the real deal is becoming a serious problem.

“It’s hard to differentiate the products that are purchased online from legitimate sources, via Canon Australia for instance, and those purchased online through eBay and other sources that may be coming through indirect or unofficial channels, or the grey market,” he said. “That’s probably one of the biggest challenges for the online market.”

Williamson claimed the emergence of these so-called ‘illegitimate products’ that don’t carry official warranties or local support is a matter that needs to be addressed by the major vendors.

“There needs to be a strategy to combat the problem. It’s an issue I’ve raised with the major manufacturers locally and the major comparative shopping engines in Australia,” he said.

Poignand noted that increased competition is lowering prices of digital technologies and fuelling consumer demand. According to Williamson, this competition is directly related to the emergence of ‘unofficial’ products in the market.

“It’s not necessarily that there are more entrants and therefore a push downward on price, its more that there is a lot of unofficial grey market products and the local market tries to respond to meet the price that’s coming from overseas,” said Williamson.

Faced with tight margins for certain commercialised items, Williamson maintains there are margins to be made in more specialised markets.

The CDLI revealed digital camcorders and digital still cameras topped Christmas lists last year, and the holiday season also saw an increase in the purchasing of games consoles and digital media players.

Product categories with the highest consumer spend were LCD televisions representing $845.5million or 29 percent of total second half of 2007 CDLI revenues, plasma televisions ($514.8m), digital still cameras ($404.1m), games consoles ($334.9m), digital media players ($315.3m), digital camcorders ($142.6m) and DVD players ($128.5m).
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