Luxury Portable Consumer Electronics in South Africa

PROSPECTS

African consumers are the primary category sales drivers

Luxury goods represent a small niche of overall 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. Sales are driven primarily by African consumers who travel regularly to South Africa and seek a unique product to distinguish themselves from the crowd.

South Africans tend to buy overseas

When it comes to South Africans, specifically, those who can afford and who are willing to splurge on such luxurious pieces tend to be regular travellers. Given that there is a wider variety of models and brands to choose from abroad, local consumers often prefer to make such purchases when they are travelling overseas.

Declining retail value growth

The lowering retail value growth of luxury portable consumer electronics during the review period can be attributed to the economic climate, both locally and in neighbouring African countries. Luxury portable consumer electronics is expected to continue declining over the forecast period.

COMPETITIVE LANDSCAPE

Niche category with few growth prospects

Luxury portable consumer electronics is a very small niche in South Africa with the country failing to become established as a growing market for these types of products. As a result, most international luxury brands are absent from the country.

The end for Vertu and its ostentatious brands

Vertu Corporation Limited, a UK manufacturer of luxury smartphones, filed for insolvency after being passed between owners since 2012. The company was known for its hugely expensive handsets.

Smartphones challenge Vertu’s unique concierge service

While Vertu bundled in a 24-hour concierge service, similar to that provided by high-end hotels, allowing users to access instant lifestyle upgrades, benefits, and exclusive services, many manufacturers of Android handsets, including Apple caught on to the consumer demand for sleek, good-looking phones. At the same time, luxury brands moved into smartphones and began to offer their own high-end alternatives, further reducing demand for Vertu products.

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