Smart, sustainable products to defy TCG market challenges

An expert from GfK says sellers can also realise better sales by introducing innovative products.

With Singapore buyers curbing their spending to prioritise only their needs amidst inflation, sellers and manufacturers of technical consumer goods (TCG) must come up with cutting-edge and sustainable products to ensure sales growth.

In an interview with the Singapore Business Review, Mukund Tripathi, a specialist in one of the top market research companies in the world, said innovative products that address specific convenience factors for consumers will continue to generate interest.

“[Sellers and manufacturers] can realise better valuation out of the market and realise better sales,” said Tripathi, head of Market Intelligence for Asia Pacific at Growth for Knowledge (GfK).

Consumers are also willing to spend on products which give them better experience and better quality despite the rising inflation. Tripathi said bigger-sized televisions worth $2,500 and more are even selling faster recently, as well as high-end mobile phones which cost $1,500 to $2,000.

Sustainable products equals sustainable operations

Apart from convenience, consumers are also drawn to products that are environment-friendly.

Coming out of the pandemic, more consumers have geared towards healthy living and Tripathi sees that in their choice of consuming products that are healthy for both the body and the environment.

The  growing environmental consideration of consumers is also one of the reasons why smart products, whilst being nascent in the market, are gaining more traction, he said.

Citing an example, Tripathi said consumers will spend money on a refrigerator that consumes 20% less electricity, as well as washing machines that consume less water.

“[There are] two companies  working on a technology to enable washing machines to use 20% to 40% less water or use a little bit of steam to clean,” the GfK specialist said.

He underscored the purposeful shift to being sustainable will benefit sellers or manufacturers in the long run.

“The resources which are available today may not be available in the future. Unless they move to sustainable products, their production is not going to be sustainable to sell in the market,” Tripathi said.

“Products will be a little costlier, but if they are efficient and consume less resources, consumers will have instant acceptability… Brands that move faster will get a better share in the market,” he added.

Meanwhile, brands that do not have new products on the pipeline may need to double their promotion offerings to clear their existing inventory.

“Some discounting is required.  When there is a lot of demand, the price of products is as it is. Today, consumers have a choice, they are waiting for the best deals,” the GfK expert said.

“There is a stock pile up and not so many things are being sold in some categories. There will be pressure  on sellers to start offering some discount to clear the inventory which is piled up on the production side,” he added.

In Singapore, amongst the TCG products that did not perform well over the past year were laptops, desktops, and monitors.

Tripathi said the segment’s underperformance may be attributed to most workers’ return to their offices.

The return-to-office and reopening of borders, meanwhile, gave personal grooming products such as hair dryers and shavers a boost in sales over the past year.

Cautious optimism

Looking ahead, Tripathi said Singapore’s TCG market will continue to face challenges, with inflation being the top obstacle.

To add, Singapore will also raise its goods and services tax (GST) anew in 2024 to 9%.

Tripathi, however, said the increase will have a “temporary” impact on the market, probably around February. During a time of slow down, the expert said marketers must strategise how to clear their inventories.

This way, when the season of sale comes in, they have new, innovative products to present.

“Those who keep bringing new, innovative products can outsmart challenges [in the industry],” he said.