The fall of the Russian electronics market in January 2023. Shortage of buyers and goods

Hello.

January is always a fairly calm month, buyers are moving away from the New Year's Eve fever,

stores replenish shelves, clean warehouses andpreparing for the Chinese New Year when supplies freeze. To stimulate buyers, retail usually gives additional discounts, revives demand in various ways. If you didn't buy a gift in December, then you can afford it next month, although the difference will not be overwhelming. The old rule of thumb has not changed: the first half of the year makes forty percent of sales, in the second we collect the rest. Seasonality has improved and is not as noticeable as it was fifteen years ago, but it is still present.

January 2023 was extremely unfortunate,moreover, the negative trend began in the second half of the month and showed itself in all its glory by the last week. This made many people reconsider their forecasts for the whole year, look at pessimistic scenarios. In 2021, the Russian smartphone market amounted to 32.5 million units (hereinafter, I use Mobile Research Group data, it is easier and more convenient to refer to my work). In 2022, the market reached the level of 26.5 million units, the forecast for 2023 was and remains about the same. January can be compared to April 2022, when a trade blockade was imposed on Russia and there were almost no new supplies, there was a moderate shortage of goods. The drop in retail sales in January for smartphones was about 30% yoy, for other electronics - from 15 to 50%, it all depends on the category.

Many factors influence the situation, the mainthe complexity of logistics remains (this will be discussed in a separate article), the lack of credit lines from manufacturers and the need to invest their own funds. It is also important here that a drop in the volume and quantity of advertising leads to a multiple drop in sales, which is clearly seen in the example of Samsung and Apple. The opposite is true - Tecno's huge marketing volume leads to the fact that the company has reached about 14% of the market in pieces and continues to grow aggressively. Along with the knowledge of the brand, sales also grow, primarily in the middle segment. And here Tecno is not at all alone, growth is shown by all Chinese companies that have room for maneuver.

Sharing thoughts about what salesJanuary fell, immediately received comments that people have no money. If every person who has been writing such maxims for many years would give me a ruble, then we would collect on a small island in the Pacific Ocean. The same “common sense” that sees a direct connection between “no sales” and “no money”.

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I will allow myself a lyrical digression abouta lack of money. Sochi, Rosa Khutor and the lift, which this year began to cost 4,500 rubles a day. Good modern lifts, no doubt. But the people who serve them look like their salaries are extremely low (no offense to be said). The lifts are packed to capacity - it is clear that the resort. It is clear that for many other countries are closed or it is simply inconvenient to fly. But here in the mountains it's packed every year, and every year the prices go up. However, hotels do not stand empty.

Upstairs at the Rosa Springs hotel, regular room withoutfrills, the cost per day is 30 thousand rubles, on February 23 and the weekend that adjoin this date, the number costs 60 thousand. Three meals a day are included, but at the level of an ordinary three-star hotel, it is simple and does not strike the imagination with the quality of cooking.

Planes flying to Sochi from Moscow and othercities are far from free, but they are packed almost to capacity. I can tell you a lot about restaurants, concerts in the city and the like, in this Russian resort the crisis is not felt so strongly, but the feeling that everyone has gone crazy and is shearing money. Prices have risen to unimaginable heights, the price / quality ratio can no longer be discussed, it does not hold water. A trip to the "Three Valleys" at this price level is cheaper, even taking into account the flight through Istanbul.

I hate private examples, I am sinful, since I myselfused this technique above. It's like judging by the number of phones in my pocket about how many phones the inhabitants of Russia have on average with them, you get a distorted picture. Agree that most people clearly have more than three devices, if we consider the average for all of us.

Warehouse occupancy is minimal in manycommodity items (hello, logistics and not only it). This does not mean that you cannot buy the right product, with proper computer skills you will find what you are looking for. The question arises of price and whether you are ready to pay as much as they ask in a familiar place, as well as availability in a particular locality. The freedom that was before, when almost any smartphone was available in a store that is within walking distance, is no more. We remember the drop in marketing costs and get less interest in any product. Plus, a slight decrease in the number of store visitors, which, when their number falls, looks strange, but understandable if we remember that the number of goods on the shelves has decreased. People stare at goods less for nothing, and if they come, they want to play with what they are ready to potentially buy.

The life cycle of electronics is an important factor,he is often forgotten. Changes in devices from year to year are minimal, so it's hard to force yourself to buy something. The lifetime is growing, as a result, sales are declining. And this is not only Russian history, it is global. For example, it makes no sense to buy an iPhone 14 if the previous generation is almost the same, only cheaper. Many buyers think this way. And a large number of buyers believe that the phone can serve to the bitter end, and therefore they have very old models in their hands, such reasoning is especially common among Apple fans. Look at the statistics from MTS for Moscow and the region, this is the number of different models in the hands of the operator's subscribers. The iPhone 11 ranked first, the iPhone 7 ranked second, and the iPhone XR ranked third. Let's look at the years when each of the models came out: 2019, 2016, 2018. Conventionally, we can say that the first model is a little over three years old, the second is six years old, and the third is four years old. You can take the iPhone 12 or 13 as an example, think about how much they will be in the hands of users, it turns out that for the 13th models, the average lifespan will be six years, that is, until about 2027. But this is the story of flagships, they have a really long lifespan. On average in the market, it fits into a period of 4-5 years.

A small survey in the Telegram channel, it is curious thatonly about 10% of respondents began to choose devices in a different price range. At the same time, 40% have rational consumption (buying as needed), they also include those who save. The survey illustrates well that a crisis is being observed, but its size and scope are not at all as great as many imagine (and there is widespread poverty, every second person has no money, and so on). The behavior of buyers has changed, and in a crisis this is the right strategy for everyone without exception.

Link to survey

Changes that have taken place in people's behaviorfar more influence sales than other factors. It has become possible for a fashionable party to use an “old” device, no one will laugh that you do not have the latest iPhone or even not an iPhone at all. It's not as interesting as it used to be. Moreover, it is not at all necessary that you have a flagship - many simply do not recognize them in their hands. Spade and shovel, large and many chambers. The edge of perception has been erased, which also affects the shift in demand to the middle segment. Moreover, many models in this segment really satisfy their customers, give them what they want for less money.

These processes began long before the worldcrisis, he simply spurred them on. And now electronics are chosen in a completely different way, the changed preferences of people form the basis for the growth of new brands so that they can gain a foothold in the market and become stronger. The Russian specificity gives another aspect - the lack of direct supplies from major brands, the limited functionality of devices, there is no official guarantee. And here the demand is shifting to the middle segment, where the pain from a broken phone is not so high, this trend is also present. Like the fact that people are more likely to repair old devices, they are less likely to replace them. Pragmatism also manifests itself in such behavioral changes.

To sum up the reflections on the market, I will give an example of global sales of smartphones, they are flying down. Last year was the worst in a decade. Look at the plate.

And here Russia goes exactly the same way asother countries. Last year turned out to be more or less good, as retail chains literally survived, sacrificing margins in order to show turnover and a good sales result. What is important not for puzomerki, but for the same banks - they say, our business remains attractive, we do not lose customers. But sacrificing their income, companies simply come to a situation where they have nothing to live on. This game definitely ends in nothing.

The whole of 2023 will be difficult, but those who will benefitplayers that will be able to work directly with their client, advertise and promote products, to some extent replace manufacturers, establish a dialogue and, most importantly, build a service model. For them, the future is cloudless, but the prices that they will offer cannot be called minimal, you can buy everything cheaply and cheerfully on marketplaces. We will also have material about them in the coming days, you can find out at what point and on what there will be huge discounts that you will not want to miss. So stay tuned for posts.

January turned out to be a difficult month, February is expected to be a little calmer, retailers rely on gender holidays.

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