The 2008/2009 recession led to a decline in demand across a wide range of consumer products. Capital flow restrictions were particularly damaging to products reliant on consumer financing, such as cars. Consumer electronics were largely spared a drastic decline in demand and many product categories such as smartphones continued growing. Even televisions saw very few declines in the midst of the recession and in some markets sales even grew rather dynamically. While the drivers of this growth differed, the glut in sales over 2008-2010 makes for a more favourable environment for digital televisions over 2014-2016 as the sets purchased during the recession approach the end of their service life.
Volume Sales of Digital Televisions During the Recession
Source: Euromonitor International
As the recession spread across the globe demand for televisions was supported by a range of different factors. In Japan the government introduced subsidies to drive demand. In North America and parts of Western Europe, cocooning emerged as a key sales driver. With rising uncertainty and falling incomes, many households in developed markets saw televisions as inexpensive entertainment options. This drove demand for primary televisions as consumers bought large, high-end televisions for use in the living room or family room, especially as manufacturers started to cut prices.
This was followed by a shift in subsequent years to small secondary televisions. This favoured low-cost sets and was a significant contributor to the success of brands like Vizio. A shift back to larger models without the weight of the recession limiting spending will accelerate the adoption of UHD televisions over 2014-2016.
A Big Help for Sony Corp and Sharp Corp
The glut in demand was particularly drastic in Japan where the government’s Eco Point scheme provided substantial incentives for the purchase of energy-efficient electronics and appliances. Volume sales of digital televisions in Japan grew from less than 10 million in 2008 to a peak of 25 million in 2010. With Panasonic Corp winding down its consumer operations, Sharp Corp and Sony Corp could see significantly improving domestic revenues as those who bought televisions over 2008-2010 start to look for replacement models.