Increased competition will continue to drive wholesale bypass, hurting industry growth
New York, NY (PRWEB) September 08, 2014
In the five years to 2014, the TV and Appliance Wholesaling industry was negatively impacted by wholesale bypass, as retailers increasingly purchased consumer electronics (e.g. TVs and stereos) and household appliances (e.g. dryers and ovens) directly from manufacturers, which lowered prices for retailers who avoided distribution mark-ups and eliminated the wholesaler's role as a middleman. This external competition caused industry revenue to decline as big-box retailers terminated their supply contracts with industry operators. Additionally, the industry's largest downstream market, consumer electronics and appliance stores, faced mounting pressure from online retailers during the past five years. Similar to large electronics stores, online retailers bypass industry wholesalers, procuring items directly from manufacturers. As consumers purchased more televisions and other related products online, industry operators were left out of the supply chain. As a result, industry revenue declined at an average annual rate in the five years to 2014.
According to IBISWorld Industry Analyst Stephen Morea, “Steady demand from the building and contractor market, however, mitigated substantial revenue declines during this period.” As new homes, apartments and condominiums were built across Canada, contractors and developers relied on the expansive inventory and brand diversity of TV and appliance wholesalers, purchasing standard household appliances, including ovens and refrigerators, from industry operators. Support from the residential construction market is expected to contribute to the increase in industry revenue in 2014.
In the five years to 2019, an expanding building and contractor market as well as technological developments in electronics, such as internet enabled televisions and energy efficient appliances, will support overall demand for industry-related products. “Nevertheless, wholesale bypass will lead to a steady contraction in the industry's largest downstream market, consumer and electronics stores,” says Morea. Increased competition will continue to drive wholesale bypass, as retailers cut wholesalers from the supply chain to lower prices and maintain market share. As a result, industry revenue is expected to marginally increase an average annual rate in the five years to 2019.
For more information, visit IBISWorld’s TV & Appliance Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry wholesales a range of electric household appliances, such as refrigerators and washing machines, and consumer electronics, such as TVs, DVD players and stereo systems. Goods are purchased from domestic and international manufacturers and then sold to mass merchandisers, department stores, home improvement stores and other appliance retailers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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