FMCG Market Watch: Consumer Electricals and Electronics in Ghana

FMCG Market Watch: Consumer Electricals and Electronics in Ghana

The consumer electricals and electronics market stands as a dynamic and ever-evolving sector, reflecting the rapid advancements in technology and the growing demands of an increasingly connected world. The rapid pace of innovations in technology is driving demand for newer and improved electrical and electronic products. Simultaneously, the expanding middle class of individuals and businesses are constantly replacing or upgrading older products with more advanced versions which has contributed to the growth in the market. This article explores the multifaceted landscape of the industry with a focus on electrical products and electronics such as air conditioning machines, refrigerators, freezers, washing machines, irons, electric burners, food processors, microwaves, blenders, microphones, speakers, rice cookers and kettles.

Market Segmentation

The electrical and electronics markets can be broadly divided into two main segments: new (first-hand) and pre-owned (second-hand) sectors. The second-hand market is primarily characterized by pre-owned items from well-renowned and high-end brands such as Samsung, Philips, and Sony. Players in this market d

Distribute varieties of preowned electronics and electricals sourced from several countries. Generally, in Accra, Lapaz is recognized as the central hub for the distribution and retailing of pre-owned electrical and electronic items.

Figure 1: Proportion of New and Old Electrical and Electronic Products, 2022  

Source: Ministry of Trade, MOTI

Conversely, the new market comprises companies and enterprises specializing in the sale of brand-new electrical and electronic items as well as franchise dealers representing international brands. Currently, newly manufactured electrical and electronic products control about 80% share of the market.

A Demand Shift from Pre-Owned to New Electricals and Electronics

Until the late 2000s, demand for pre-owned electronics was the order of the day. The new electronics market at the time largely constituted so-called high-end brands that were too expensive for most consumers to purchase as brand-new. The limited presence of affordable brand-new options and the general notion among consumers that used electrical products were just as reliable as the new ones fueled this preference. Historically, consumer demand for electronic products was largely influenced by considerations of product quality and brand reputation irrespective of whether the products were new or pre-owned. Established brands such as Sony, Philips, and Kenwood were regarded as durable and long-lasting prompting consumers who couldn’t afford new products from these brands to opt for pre-owned items over less popular brand-new alternatives.

Currently, demand for pre-owned electrical and electronic products is gradually declining. This trend is attributed to the fact that there are currently a lot of affordable brand-new electronic products in the market that are of competitive pricing and quality. Further, the influx of numerous new energy-efficient electrical products in the market at competitive prices with comparable quality to second-hand products has led to a heightened preference for new electrical and electronic products among consumers.

A Promising Import Market for Electricals and Electronic Products

In 2022, the market for imported electronics and electrical goods, including both new and pre-owned items, reached an estimated value of $124 million. Predominant among these imports were televisions, air conditioners, refrigerators, freezers, washing machines, and blenders, collectively accounting for approximately 60% of the market share. Other significant categories of imported electronic and electrical items are speakers, microwaves, irons, kettles, and electric cookers.

The recent announcement by the Energy Commission to ban selected used and substandard electrical appliances, set to take full effect by the end of 2023, will give a further boost to the market for brand-new electronic products, especially given the prevailing consumer preference for new products in the electronic and electrical sectors.

As of 2022, there were almost 100 electrical and electronic brands in the market. Prominent among them are brand names like Hisense, Nasco, Samsung, Midea, Binatone, and Philips dominating the landscape. The top importing countries for electronics and electrical goods, namely China, Turkey, the UK, the USA, and Italy, collectively contribute to around 80% of the total imports. The figure below provides an insightful overview of the electronics and electrical import market.

Figure 2: Electronics and Electricals Import Market, 2022

Source: Ministry of Trade, MOTI

Price is the Game Changer

Price has been a key driver of the electrical and electronics market. Given that prices of electrical and electronic products are on the rise, affordability has become a significant driver for consumer demand, especially when consumers are presented with several alternatives. The attention consumers give to the price of electronic products often outweighs considerations of product quality, especially with the increasingly difficult economic environment.  In response to this market trend; there is intense competition among key players to reasonably price their products to attract more attention for their brands. Many market players have adopted unique pricing strategies to sell their brands coupled with effective and strategic marketing highlighting the advantages of their products over their competitors. Further, this pricing trend has opened up the market to refurbished models of well-established brands offering customers relatively cheaper options. The table below provides the prices of selected brands of electronics and electrical products in the Ghanaian market. Prices vary significantly depending on the brand and specifications considered by the customer.

Source: Market Survey, 2023

The rise of E-Commerce Platforms has Heighten Demand for Electronics

The emergence of e-commerce platforms has played a pivotal role in reshaping the retail landscape for electronic and electrical products. These platforms offer a variety of electrical and electronic products with competitive pricing, and the convenience of doorstep delivery, contributing significantly to the market’s expansion. Further, with a 68% internet penetration rate in the country as of 2022, a larger proportion of the population now has access to online platforms resulting in increased engagement in e-commerce activities.

Several key players in the market have leveraged the growing internet penetration to deepen their market presence by establishing online platforms to sell their products. Companies such as Sun Electronic Limited, Electro land Ghana, KAB-FAM Ghana have developed user-friendly and interactive e-commerce platforms allowing customers to conveniently order electronic products and electricals online. Some even offer free deliveries to incentivize purchases through their digital platforms. Generally, the rise of e-commerce platforms has not only increased market reach but has also encouraged healthy competition among retailers, fostering innovation and competitive pricing.

Opportunities for Market Growth

The electronic and electrical market in Ghana holds considerable growth potential, with untapped markets and unexplored opportunities. Currently, electronic products such as washing machines, refrigerators, speakers, heaters, blenders, juicers, etc., are imported, creating an opportunity for investors to explore local production or assembly of these items. Government policies and initiatives such as the ‘one district one factory’ provide attractive incentives for manufacturing activities within the country.

Moreover, Ghana’s strategic position as an ECOWAS country positions it as a gateway to other West African markets, with preferential trade agreements facilitating smooth exports. Already, about $280,000 worth of electronic and electrical products are exported annually.

Potential investors could consider collaborating with local players as a strategic approach for foreign companies to navigate the market. Despite the presence of numerous brands and franchised dealers, the market remains open to new entrants, provided they offer competitive quality and pricing.

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About the Authors

Anita Nkrumah

Head, Research and Business Development

Firmus Advisory Limited

Rachael Dampson

Research Executive

Firmus Advisory Limited