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COVID-19 & The Imaging Market: An Unprecedented 2020 But Hope for 2021
As much of the world comes to terms with the realities of quarantine and lockdown to combat the spread of COVID-19, it is clear that the virus is having a profoundly negative impact on the consumer imaging market. Whilst the forced closure of retailers in many countries has played a large part, the call to stay at home will inevitably reduce the number of occasions for taking photos and will be an added blow to this market in particular. It’s also key to remember that as the virus originated in East Asia - where much of the world’s electronic manufacturing is based - the industry has also had to contend with component supply shortages and manufacturing delays.
Quarantine measures in East Asia meant 2020’s first quarter was marked with delays and component shortages throughout the imaging industry. Canon temporarily closed five factories in March due to component shortages and Ricoh took similar measures. The likes of Sony, Fujifilm & Sigma have also reduced production over the period, citing coronavirus as the cause. However, as East Asia was the first to feel the effects of the virus, it is expected to be the first to recover. Supply and production are gradually returning to normal in the region, as government initiatives to control the outbreak begin to pay off, with the outlook in both China and South Korea already improving.
The necessity to implement social distancing and lockdowns to combat the spread of COVID-19 is having another impact on the market; not only has it already had to contend with the aforementioned production issues, but it will now face a shortfall in demand for which it is particularly exposed.
The reasons for market decline are illustrated by trends identified in the latest edition of Futuresource’s Consumer Research report ‘Imaging Ecosystems’. The report draws on 5,000 in-depth interviews to comprehensively profile the lifecycle of a photograph from the moment of capture. Analysis reveals that amongst smartphone, interchangeable lens and compact camera users alike, the most popular occasions to take photos are holidays, day trips and family events. The numbers speak for themselves; 58% of DSLR owners said they have used their camera to take holiday photos in the past 12 months, and 47% of compact camera owners used their device on day trips in the same time period. The report also suggests that the closure of non-essential bricks-and-mortar retail spaces poses further problems for the industry, as over 60% of respondents elected to purchase their camera in store compared to online. Given that much of the world now finds itself at best social distancing and at worst under lockdown, it makes little sense in the immediate term for people to use - yet alone buy - a camera when their holiday plans are cancelled and are not able to be with family and friends. Devices that are used largely for sports and outdoor events, such as 360 cameras & action cameras, will see an even greater hit to demand.
The need for strict virus countermeasures has therefore had a knock-on effect on high profile events such as the Tokyo Olympics, Euro 2020, and Wimbledon - all of which have been cancelled or postponed this year. This will have ramifications for the high-end interchangeable lens market, which was originally poised to see a boost in 2020 to coincide with the growth in worldwide sports activity, and the release of new flagship DSLRs from Nikon and Canon timed to coincide with Tokyo 2020. In light of the softening market and cancellation of key industry events, the roadmap for new product releases has been thrown into disarray. It is expected that many camera vendors will now delay further product announcements and revise their launch campaigns.
COVID-19 has made for an incredibly turbulent start to 2020 that could not have been predicted. Whilst the market is currently under enormous pressure, it is important to remember that these first few months of sudden change to daily life are where its impact will be greatest. How well individuals, businesses and states recover depends on the effectiveness of containment measures and financial support offered by each nation’s governments respectively. As things stand, the industry can look forward to a post-coronavirus rebound in 2021, caused by the concentration of activity now scheduled for next year. Increased investment in time for the rescheduled Olympic games and Euro 2020 tournaments will pay a considerable part in the professional space, whilst a pent-up desire for travel and holidays amongst consumers will come into play once restrictions on movement and international travel are eased.
Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.