Resilient Market Awaits a New Buying Cycle

Despite geopolitical tensions, supply-chain disruption, and persistent price pressure, the consumer electronics and home-appliance market is proving more resilient than might be expected. Carine Chardon, Managing Director of GFU Consumer & Home Electronics, argues that the industry has been operating under unstable conditions for several years and has developed mechanisms to adjust production, logistics, and demand.

“I am not a visionary, so I cannot predict the future, but we observe trends and think about what is coming,” Chardon says. The challenges facing the sector did not emerge overnight. Supply-chain restructuring, higher costs, and geopolitical uncertainty have accompanied the industry for years. “The sector is resilient and has the means and ways to overcome these challenges and threats,” she says.

One reason for cautious optimism is the approaching product-replacement cycle. During the pandemic, many consumers brought forward purchases of televisions, computers, household appliances and other equipment. A growing share of those products will soon need to be replaced. “The purchases we saw during Covid will now bring back the need for product replacement,” Chardon explains. A recovery in construction could provide an additional boost, as new and renovated properties create demand for kitchens and integrated appliances.

Rising purchasing power in emerging markets is also changing the global map of demand. Sales may shift between continents and countries, but the overall market remains robust. “If a market is down on one side, it might be up on the other,” Chardon says. Consumers, in her view, will continue to need technology that supports them in their daily lives, work and homes.

Artificial intelligence is entering this sector not through a spectacular disruption, but gradually, through functions that improve safety, efficiency and ease of use. “AI has not entered household appliances with a huge boom,” Chardon stresses. Instead, it is being embedded through small but useful capabilities. An oven that recognises cooking conditions and helps prevent a cake from burning, or a system that reduces the risk of users or children burning their fingers, are examples of technology delivering practical value.

 “These are small but really important steps that AI is bringing to our sector,” Chardon says. She sees this development as more sustainable than simply attaching an AI label to every product. The technology is appearing first in premium devices, but it is likely to move quickly into the mid-range segment. “AI is not just a fancy buzzword; it is coming to stay,” she adds.

The largest short-term challenge remains the price of memory chips, which affects computers, smartphones and other connected devices. Chardon expects the expansion of production capacity to ease shortages and price pressure over time. “Prices will not stay this high for so long,” she predicts, although the speed of normalisation will also depend on inflation, energy costs and wider global developments.

In this environment, IFA is again demonstrating the importance of major trade fairs. The pandemic raised questions about whether physical events were still necessary, but the return of exhibitors and visitors has provided a clear answer. “Trade fairs are back, and IFA is thriving,” Chardon says. Companies use the event not only to present products but also to build international business relationships and communicate with global markets from Berlin. The physical meeting point between industry, retail, media, and consumers remains valuable precisely because technological change is accelerating.