Although the lockdown scenarios were different in all three Baltic countries, this did not stop the market from showing one of the best results this quarter.
Different lockdown outcomes and customer habits did not stop growth in the Baltic market. Dark winter evenings and more time spent indoors were reflected in consumer market trends, leading to growth in home comfort. In addition, the reopening of stores in Lithuania in March shook up robust MDA free standing groups.
Sales value grew 29%, twice more than the sales units, 18%. All sectors followed the same trend of spending “more than the average” on each item. Although the market is experiencing price surges in certain categories, such as notebooks, people are choosing more technologically advanced products.
The biggest growth in the Baltics was seen in the CE sector, where TVs showed the biggest numbers, +26% in Sales Units and +47% in Sales Value. Second, the IT sector with +20% in Sales Units and +33% in Sales Value. The first quarter results showed a stabilization of the notebook market, +17% in Sales Units. However, it is expected that the second quarter may show negative results. It is important to remember that last year was the year of notebooks and the trend this year has shifted to monitors. In all Baltic countries monitors showed record-breaking numbers with +45% growth in the market compared to last year. However, it is expected that the sales figures are likely to decrease in the second quarter.
The third group – Small Domestic Appliances, whose dominant products are robot vacuum cleaners and hot beverage makers, showed unexpected growth in Q1, +15% in Units and +41% in Value. In particular, Hot Beverage Makers had growth of +26% in Sales Value and +41% in Sales Units, while vacuum cleaners were +28% in Sales Units and +50% in Sales Value.
Next is the MDA Sector with +12% Sales Unit and +16% Sales Value growth. It is important to note that the MDA sector is heavily dependent on physical sales and the physical stores factor, especially for the freestanding group. After re-opening stores in Latvia and Lithuania in March, the MDA sector grew 47% year-to-date. Similar to the SDA sector, the MDA sector also showed the biggest growth in home comfort groups. Dishwashers grew +37% in Sales Units and +40% in Sales Value. Tumble dryers were second with +32% in Sales Units and Sales Value. However, the market also had negative trends – freezers. Comparing this group to last year when the market saw a shortage of freezers, there was an 8% drop at times this quarter.
The TELCO Sector – the most important and largest group in the Baltic technology market – also showed positive trends in the first quarter with +5% in Sales Units and +16% in Sales Value. These results were heavily influenced by the early release of a certain manufacturer’s flagships. It is likely, that growth would have been higher had it not been for a supply shortage. It is also clear that Network Operators are leading in the TELCO Sector and physical stores are the key driver of performance.
Each Baltic country had different quarantine restrictions as well as their scenarios in Q1 of this year as well as last year, both of which showed different trends and challenges in the market. In March 2020, Lithuania saw a surprise closure of stores, while Estonia and Latvia continued to operate, albeit with restrictions. It is also worth noting that Estonian stores were open in the first quarter of 2021, therefore the market growth in this quarter was lower than in the other Baltic markets (+8% in Sales Units and +14% in Sales Value). On the other hand, Q1 in Latvia recorded +28% growth in Sales Units and +36% in Sales Value, while Lithuania recorded +17% in Sales Units and +31% in Sales Value.
Although overall growth in Q1 was different for all three Baltic countries, consumer trends remained almost the same. First, TVs grew the most in all Baltic countries, followed by robot vacuums and hot beverage makers. It is also worth noting that Dishwashers were among the leading groups in all Baltic countries in the first quarter.A clear difference between consumers in each country can be seen in the IT sector. In Estonia, sales units remained almost identical to last year, while in Latvia there was a 31% increase and in Lithuania a 22% increase in Sales Units. Overall, it can be said that Estonia was always slightly ahead when talking about IT penetration in households and its quality.
Looking back at online and physical sales channels, consumer behavior did not change radically despite the quarantine. Online sales increased, but after the opening of physical stores, the market channels have returned to normal levels.