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Executive Summary

Table of Contents

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EXECUTIVE SUMMARY

The focus of this report is the brown goods division of the UK household appliances market. The term `brown goods' is used to describe products that include televisions (TVs), video cassette recorders (VCRs), camcorders, all audio products and compact disc (CD) players. `Brown goods' is a reference to early TVs, radios and radiograms that came packaged in wooden, wood-coloured plastic or Bakelite cases. Brown goods are all essentially entertainment products.
Between 1995 and 1999, the market experienced a period of strong growth in value. By 1999, the value of the total UK brown goods market at manufacturers' sale prices (msp) was £3.27bn, a rise of 2.9 percent on 1998, and an increase of 14.8 percent over the period 1995 to 1999. This growth was driven by a number of factors including the increasing strength of the world economy generally over this period, and the development and increasing market penetration of these products. The latter part of 1998 and the early part of 1999 has witnessed a general slowdown in the growth of the value of the UK brown goods market, largely due to oversupply, a tightening economic climate and the effect of the continuing strength of sterling. Asian and US multinationals have begun to reduce manufacturing capacity in the UK in response to these forces.
Although the UK market is mature, the UK Government's commitment to digital broadcasting technology and the liberalised nature of the UK telecommunications industry offer good opportunities for investment in consumer electronics. Nevertheless, the wide fluctuations of the pound and indecision over European monetary union (EMU) does seem to be causing some companies a measure of concern.
The strength of sterling since 1996 has been a serious cause for concern for both manufacturers and distributors of electronic consumer goods. Export markets are more difficult to penetrate with sterling at such high levels, and competition in domestic markets is intensified by foreign competitors taking advantage of the relative weakness of their own currencies. The collapse of some currencies, above all in South East Asia, has exacerbated the problems for UK-based manufacturers.
During 1999, the brown goods market in Europe is being affected both by the worldwide imbalance between supply and demand and general economic uncertainty in the region. Since 1997, demand for digital goods such as digital video cameras and MiniDisc players has been strong. Production of major products such as TVs and VCRs, however, remains sluggish.
Key Note expects the value of the brown goods manufacturing industry in the UK to grow by 19 percent in real terms to reach £3.9bn at constant 1999 prices by the end of 2003. Key Note expects limited market growth in 1999 and 2000, as the current over-supply situation in some market segments corrects itself. However, from 2001 there will be steady growth in the overall market up to the year 2003.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET TRENDS

Market Size

MARKET VALUE

MARKET VOLUME

Table 1: The UK Household Appliances (Brown Goods) Market by Value (£m at msp and index 1995=100), 1995-1999

Table 2: The UK Household Appliances (Brown Goods) Market by Volume (000 units and index 1995=100), 1995-1999

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

DISTRIBUTION

TRADE ASSOCIATIONS AND REGULATORY BODIES

Table 3: Number of VAT-Registered UK Enterprises Manufacturing Household Appliances (Brown Goods) by Turnover (£000), 1998

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 4: Selected Leading Companies in the UK Household Appliances (Brown Goods) Market by Turnover (£m), 1997/1998

Table 5: Main Media Advertising Expenditure in the UK Household Appliances (Brown Goods) Market by Product Sector (£000), December 1997-1998

Table 6: Main Media Advertising Expenditure in the UK Household Appliances (Brown Goods) Market by Major Suppliers (£000), December 1998

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

TELEVISIONS

VIDEO CASSETTE RECORDERS

SATELLITE AND CABLE

AUDIO PRODUCTS

CAMCORDERS

Table 7: Penetration of Television Ownership in Great Britain ( percent of adults), 1998

Table 8: Features of Installed Television Sets ( percent of adults), 1998

Table 9: Penetration of Video Recorder Ownership in Great Britain ( percent of adults), 1998

Table 10: Video Recorder Usage in Great Britain ( percent of adults), 1998

Table 11: Penetration of Satellite and Cable Television Reception ( percent of adults), 1998

Table 12: Satellite and Cable Television Usage in Great Britain ( percent of adults), 1998

Table 13: Audio Equipment Ownership by Type of Equipment ( percent of adults), 1998

Table 14: Penetration of Camcorder Ownership in Great Britain ( percent of adults), 1998

Outside Suppliers to the Industry

ELECTRONIC COMPONENTS MANUFACTURERS

CONTRACT MANUFACTURERS

PLASTICS PROCESSORS

THE BATTERY INDUSTRY

Current Issues

DIGITAL RADIO

DIGITAL NETWORKS

THE STRENGTH OF STERLING

REGIONAL DEVELOPMENT AND INWARD INVESTMENT

CONTRACT MANUFACTURING

THE EUROPEAN UNION AND GREY IMPORTS

THE INTERNET OPPORTUNITY

NEW AUDIO FORMATS

Forecasts

INTRODUCTION

FORECASTS 1999 TO 2003

Table 15: The Forecast UK Household Appliances (Brown Goods) Market by Value (£000 at msp and index 1999=100), 1999-2003

Table 16: The Forecast UK Household Appliances (Brown Goods) Market by Volume (000 units and index 1999=100), 1999-2003

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HOPPENSTEDT BONNIER INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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Last updated by Jacob van Eldik 21th January 2000