The crisis reversed the need for mass market pricing drops
Three factors combined to drive up average retail sales price (ASP) in the first four months of 2021: strong demand, an increase in the cost of raw materials and supply challenges. ASP increased 20% globally in the TCG market between April 2020 and April 2021.
As the chart shows, the upward trend in average selling prices (ASP) can be seen across the TCG market and in all major product categories. Looking at April 2021 data, prices in Consumer Electronics rose 32% globally compared to the same time last year. IT increased 19%. Telecom remained flat although previously the category experienced prices. In February 2021, for example, ASP peaked with a plus of 29%.
Three factors are inflating average selling price: strong demand, the increase in sales of premium products, and the growing cost of raw materials. The pandemic disrupted previously familiar pricing trends. For instance, in TCG mass markets, we are accustomed to seeing falling prices, but during the last few months prices have risen for products including 60” LCD TVs, webcams printers (inkjet, multifunction) and 27’’ monitors.
On the one hand these price increases are caused by ongoing demand for IT infrastructure. After having satisfied their immediate needs for home-bound activities, consumers invested in improving their environment and equipment better for working, learning, and entertaining at homeMany upgraded to faster internet and infrastructure and prepared for video conferencing and printing needs.
On the other hand, and in addition to unusually high demand, the exploding costs of commodities, increases in shipping costs and chip shortages have impacted prices of IT categories.
The factors driving price increases are here to stay. It will be absolutely key to success in the peak season to monitor pricing changes in near real-time across the sector to make sure you get your prices right.
Source; Commodities Prices - Spot - Futures (tradingeconomics.com) | LCD TV Panel Prices Keep Going Up - Display Supply Chain Consultants
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