The FIFA World Cup is a spectacle unlike any other in football or the world of sport. A question of billions tune in when it’s held every four years, so it’s no wonder the competition is known as “the greatest show on Earth.”
This year’s tournament in Qatar is the first ever edition of a winter World Cup, but the appetite for watching the action unfold remains strong – and that’s certainly music to the ears of TV retailers.
According to GfK research, a World Cup year just equates to a good year for TV sales. For example, the 2018 FIFA World Cup in Russia led to a 2.9% increase in the global TV market, with 221 million units sold to consumers looking to upgrade their home for the tournament.
A winter competition this time around meant that the usual outdoor football festivals for European audiences were not possible, forcing more and more fans to watch their nation from the comfort of their own home. In fact, the TCL survey found that a whopping 86% of Europeans will watch the 2022 World Cup at home – with a further 8% of respondents saying they would upgrade to new technology for the occasion.
However, while this may seem like nothing but good news for TV retailers across the continent, the reality is different.
Statista expects that the volume of TV sales in Europe in 2022 will fall to its lowest level since 2014, at 67.4 million units – representing a -12.9% year-on-year change. Meanwhile, the world’s top TV maker Samsung reported weak sales of large panels (TVs and monitors) for the third quarter of 2022 in preparation for the World Cup, and Reuters reported that second-largest maker LG suffered a similar decline.
It wasn’t because of the desire to try either. Premium retailers such as Samsung and LG adopted frequent promotions in 2022 to get new TVs into European homes, but consumer demand was not as strong as in previous World Cup years.
As analyzed in our article on inflation, consumer demand in multiple sectors fluctuates dramatically throughout the year. Rising oil, energy and food prices have led to unprecedented levels of inflation, causing consumers to prioritize discretionary, more important products over non-discretionary items such as televisions.
Seasonality could also suggest that consumers waited for Black Friday, Christmas or January, rather than investing before the World Cup began.
However, another common theme during the financial challenges of 2022 is that consumers are switching premium brands to more budget items, and Chinese manufacturer Hisense is taking advantage of the European TV market.
Hisense reported rapid year-on-year growth of 18% globally in the first nine months of 2022, including 24 million TV sales in Europe and a jump in market share from negligible to fourth place in the charts.
Some individual European countries also returned strong TV sales in the run-up to the World Cup despite overall figures for 2022. UK retailer OnBuy, for example, saw sales of home theater systems jump a remarkable 1,769% in the seven days leading up to the opening at the tournament.
Elsewhere, fellow UK retailer AO World saw revenue fall 17% in the six months to September, but is pinning hopes on a strong World Cup performance from England to boost tech sales (according to This Is Money).
“Every World Cup gives our business a really positive boost around sales of things like TVs. The further England goes in the competition, typically the more TVs we sell,” said John Roberts, founder and chief executive of AO.
In the world of logistics, fluctuations in demand mean that the ability to speed up and slow down the supply chain is critical when it comes to balancing operations.
TV sales figures from previous World Cup years (or indeed the hopes of a particular nation’s success) will cause some retailers to increase inventory to cater for the surge in orders. If such a surge has not materialized, work will need to be done to manage stocks accordingly and prevent an overstocking crisis.
It is almost as difficult to predict the winner of the World Cup as it is for TV manufacturers to plan the level and location of their inventory – given the current times of schedule reliability challenges, extreme volatility in transport prices and fluctuations in consumer demand . Therefore, it is safe to say that end-to-end supply chain management has never been more important. To prevent bottlenecks leading to unnecessary upstream or downstream costs, production/multimodal transport capacity management and destination capacity overflow solutions must be integrated. This will maximize supply chain flexibility and allow businesses to absorb individual changes in their logistics operations.
As we approach 2023, the European TV market is expected to improve slightly according to Statista, but the numbers will remain fairly stagnant and new EU regulations may further affect the industry.
Digital Trends reports that the EU will introduce new standards in its Energy Efficiency Index (EEI) from March 1, 2023, limiting energy consumption for electronics within member states. There is currently no 8K TV on the market that meets the regulations and can subsequently be sold in the EU.
It remains to be seen whether the new EEI conditions will change or if some solution can be found – such as a lower quality EU picture mode for 8K TVs – but it is clear that if the legislation remains in place, the ripple effect will certainly be felt throughout Europe in 2023.
