Luxury Portable Consumer Electronics in South Africa

2020 IMPACT

Border closures reduce sales to international tourists but locals purchase in-country

Although luxury portable consumer electronics saw retail volume and current value declines in 2019, these were minor compared with the massive falls in sales experienced in 2020. In 2019, more than half of sales of luxury portable consumer electronics were attributed to spending by international tourists.

Store closures and lower incomes also negatively impact sales

However, other factors also contributed to the significant decline seen in luxury portable consumer electronics in 2020. Due to the emergence of COVID-19 in the country, the government imposed a strict lockdown, during which all non-essential store-based retailers had to close.

Luxury mobile phones is the only notable category

Luxury goods represent a very small share of overall sales of portable consumer electronics in South Africa, as they appeal to a limited group of people, namely connoisseurs and those with the discretionary income to purchase such items, given their hefty price tag. Luxury mobile phones remained the sole product category accounting for notable sales within luxury portable consumer electronics in South Africa in 2020, Despite only seeing annual sales of less than 100 units, the high average price tag still generates notable revenue in this category.

RECOVERY AND OPPORTUNITIES

After a release of pent-up demand, a return to decline

Both retail volume and current value sales of luxury portable consumer electronics are expected to rebound in 2021, with growth by both measures. Although COVID-19 restrictions remained in place at the beginning of the year, these are expected to be eased and even lifted during the course of the year as a vaccination programme is rolled out and the number of infections falls.

Competition from high-end smartphones

In the forecast period luxury mobile phones is likely to continue to be dominated by licensed branded products, such as Tonino Lamborghini’s luxury smartphone. However, with fewer than 100 units sold in the category overall, even this brand may choose to pull its offering from the market.

Continued absence of luxury wearables due to lack of availability

Meanwhile, there are no plans for brands or players to enter luxury wearables over the short-term, as the country continues to grapple with the impact of the pandemic. Due to the low demand for such products, reputable brands and models such as TAG Heuer Connected, Hermès or other fashion brands are unavailable.