Football World Cup sees TV sales shoot up in Romania

Whenever there is a major sports event, like a football championship or Olympic Games, sales of TV sets spike. The desire to see one’s sporting favorites competing makes consumers invest in the latest technology possible so the images are perfect. And the Romanian market is no exception.

By Aurel Dragan

The technology is changing every year, with better images and connectivity. TVs are becoming smart just like phones and trends suggest that TVs will replace PC monitors and tablets for viewing online productions. While television in general is being replaced more and more by the smartphone or laptop (40 percent of teenagers in developed markets no longer watch TV), TV sets are not waiting to become obsolete, but are moving towards online platforms, like Netflix, YouTube or any other provider of entertainment through internet.

This is the reason smart TVs that allow internet browsing and the use of apps available online made up 63 percent of total sales last year. There are 158 color TVs per 100 households in Romania (roughly 15 million TVs), according to a report by the National Institute of Statistics, but around 20 to 25 percent of all households still have old cathode ray tube TVs.The technology is changing every year, with better images and connectivity. TVs are becoming smart just like phones and trends suggest that TVs will replace PC monitors and tablets for viewing online productions. While television in general is being replaced more and more by the smartphone or laptop (40 percent of teenagers in developed markets no longer watch TV), TV sets are not waiting to become obsolete, but are moving towards online platforms, like Netflix, YouTube or any other provider of entertainment through internet.

In 2016, when the Olympic Games and European Football Championship took place, sales of TVs went up by 35 percent, reaching 1.4 million units. Sales were also supported by a general feeling of confidence in the economy so the growth was a lot bigger than expected. Last year, sales rose, but only by 6-7 percent, closing the year at 1.5 million units sold.

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So the outlook for this year is optimistic. “A football championship event brings certain sales growth, especially for large TVs,” says Laurentiu Faur, director of marketing and communication at Panasonic Romania. The Japanese producer is focusing on premium TV sets and has a target of 15 percent by value of OLED TVs this year. “We can see an increase in customer demand for bigger televisions and 4K resolution. In terms of value, 4K TVS make up close to 50 percent of the market, while 80 cm TVs, the biggest sellers, are going down,” adds Faur.

Fever pitch: sales climb

According to a GfK TEMAX study, the value of the electronics market (TV sets mostly) was EUR 506 million last year, up 9.2 percent from 2016. In the first quarter of this year, according to the latest official data available, sales were up 16.2 percent, to EUR 107 million. For January-May, data on the TV set market indicate an increase of 15 percent by volume (units sold) and almost 25 percent by value. The numbers are in line with a year dominated by the World Football Cup, Russia 2018, which started a couple of weeks ago.

The numbers will most likely fall off through to the end of the year. “In 2018, growth will be moderate with around 100,000 more units added to the level registered in 2017,” said representatives of Samsung Romania. “Last year, there was a larger increase in the first half than in the second one, with the rise supported by a series of macroeconomic factors – wage growth, VAT cuts, post-election euphoria and good credit conditions.”

An interesting development in the first five months of this year was an increase in sales of low-cost TVs with small screens (60-80 cm), according to market sources. Brands like Vortex, owned by Complet Electro Serv company, part of Altex Group, found their way into customers’ shopping carts, going up in terms of market share by volume. In the first five months of 2017 the top selling brands by volume were Samsung, followed by LG, Philips and Vortex. This year, Vortex has gone up, overtaking Philips and closing the gap with LG.

In terms of value, Vortex is nowhere near the top, which is dominated by Samsung, LG, Sony and Philips. Samsung is the leader on both segments (by volume and by value) because it covers all screen sizes and price segments, accounting for more than 40 percent of the Romanian market.

Today, about 50 percent of the market is made up of 40 inch (102 cm) TVs and half of TVs measuring less than 40 inches. There has been an increase in the average size of the screen: in the past the halfway mark was drawn at 80 cm, not 102 cm. The average price of a TV is also increasing, but only slightly: it stood at RON 1,225 last year, versus RON 1,215 in 2016. While there has been an increase in the sales of big TVs, which are pricy, the average price is kept low by the sale of small and cheap units. For example, while a 4K resolution smart TV of over 45 inches can be found at RON 2,300-2,500, a 23 inch TV (60 cm) can be bought for RON 500-700. Even more, “a 4K resolution TV (Class A brand) can be purchased at a full price of about RON 2,300-2,500, while during sales season it can fall to RON 1,500,” said Samsung representatives.

The brands dominating the market are Samsung, LG, Sony, Philips and Panasonic, which account for around 80 percent of total sales.

Ultra High-Definition, the technology of choice

Romanians want a new TV to be high-performing, have a wireless connection to the internet, to be Full HD or UHD (Ultra High-Definition or 4K), and have a good and clear sound. Last but not least: it should be on sale! This is according to EvoMag, an online electronics retailer, which expects sales of TVs to go up 30 percent between May and July due to the World Cup.

“Romania’s passion for football can be seen in the retail electro-IT business. By the end of the World Cup, we expect to have sold over 4,000 TVs on evoMAG, up by over 30 percent versus last year,” says Mihai Patrascu, CEO of evoMAG, who added that TV sales are expected to be up by 20 percent over the full year.

As for the technology, producers agree that the future belongs to OLED and 4K, with good design and clear sound. “Sony is focusing on large Bravia TVs, remarkable for improved image, improved sound and user experience,” said Gheorghe Mares, commercial cluster head at Sony for Romania and the Moldavian Republic. “OLED and 4K HDR (High Dynamic Range) technologies will be the main attraction for a long time. OLED TV sales are rising and we expect more and more consumers to opt for this technology in the coming years.”

Sony is focused on premium devices, which is why it leads sales by value, but not by units sold. “Last year we launched the A1 OLED model and this year we launched the AF8. Both models feature Acoustic Surface technology, which enables sound generation directly from the screen, resulting in a new immersive experience,” says Mares.

The same strategy is used by Panasonic. “We want to grow on premium TVs, where image quality matters a lot. For these OLED TVs, we have a 15 percent market share target in 2018,” says Faur.

“The TV has become a multimedia hub where access to custom content is very important. That’s why video on demand applications will become increasingly important. We also expect high customer demand for high-quality TVs, and here Panasonic offers a complete solution through its OLED TVs, which are also used in Hollywood post-production studios as a monitor customer reference in testing video productions,” adds Faur.

Samsung, meanwhile, covers all categories, with a focus on the latest technology that can be used for TVs. “This year Samsung launched the new QLED TV models – the most technologically advanced in the Samsung portfolio. With unique design features, incredible picture quality and intuitive smart features, the new Samsung QLED 2018 range offers users a complete viewing experience – even when the TV is turned on in the background,” say officials. This means that it can mimic the background if the user wants it (and takes a picture of the wall that is afterwards used as a screen saver).

UHD technology is gaining momentum and sales are rising. “Last year, sales of UHD models generated about 38 percent of total TV sales in Romania and almost half of Samsung’s sales,” say Samsung representatives. As for the future, the Korean company is focusing on IoT (Internet of Things) and connectivity between devices. “We have built the perfect connectivity between IoT devices by unifying existing IoT applications into one, the SmartThings application. Now, we have a single cloud to manage Samsung’s IoT ecosystem, namely SmartThings Cloud, and put Bixby on more devices so users can have a smart interface in their IoT ecosystem,” say officials.