There are not many industries that can say that they have benefited from the Corona crisis. While such an effect is obvious for biotech companies or manufacturers of disinfectants, it is rather surprising for others.
One such winner is the German electronics retailer. When the country was in a lockdown, the Germans bought notebooks, headphones and kitchen appliances as well as they could. Euronics, a network of over 1,000 electronics retailers, was clearly affected by this boom in demand.
“It is not always just Corona that is owed, but also the fact that you have now brought yourself up to date,” says Benedict Kober, spokesman for the board of Euronics, in the podcast “The hour zero” (Personal-Financial.com, Stern, n- tv). On the one hand, people would have upgraded their IT equipment, such as computers or speakers, to be able to take part in video conferences in their home office or online lessons.
However, many apparently also used the opportunity to bring their home devices up to date and set up at home. Kober calls this effect “social cocooning”, which brought “three-digit growth rates” for several weeks, especially in online retail.
VAT reduction plays a minor role
But even when the shops reopened, the Germans stormed the electronics markets – and sought advice, requested service technicians, or bought spare parts. Market researchers at GfK found that sales of technical consumer goods between January and June were four percent higher than in the previous year.
In Kober’s view, one of the sales drivers on which the Federal Government relies plays a rather minor role: the reduction in VAT. As part of the economic stimulus package, it was decided that a rate of 16 instead of 19 percent should apply to most products by the end of the year – which is expected to increase consumption. However, Kober is skeptical about his industry.
“I’m rather cautiously optimistic about the temporary reduction in VAT, to say the least,” said the Euronics board spokesman. Although it is conceivable that customers had the lower rate in mind before the end of the year when buying, this would rather lead to early purchases, which would then be missing in the coming year.
In the new episode of “The Hour Zero” you can hear directly what the “Eude Deude Deude Deu” means in Euronics advertising and why the association now wants to sell cars Audio Now, Apple or Spotify or via Google.