Content thumbnail Market Monitor, Issue 01 | 2023
AI Content Chat (Beta) logo

Market Monitor, Issue 01 | 2023

Food Inflation – Japan, Residential Building Trades – UKOnline, Solar Panel Demand – Europe, Online Pharmacies – India, Independent Rehabilitation Hospitals – China, Demand for Garmin Products – US.

Issue 01 | 2023 allianzgi.com Grassroots Research® Market Monitor Food Inflation – Japan Online Pharmacies – India Independent Rehabilitation Residential Building Trades – UK Solar Panel Demand – Europe Hospitals – China Demand for Garmin Products – US Food Inflation – Japan Grassroots conducted interviews with Price hikes by food and beverage sources at supermarkets and grocery companies typically range from stores in Japan to understand the 4% to 11%. impact on pricing and consumption due 82% who commented said their sales to price hikes imposed by major food volume dropped after price hikes of and beverage companies. food and beverage products, citing Regarding implementation of price consumers decreasing the number hikes, 39% who commented said they of items purchased, choosing less instantly raise prices as soon as price expensive items, and visiting stores less hikes are announced by food and bever- frequently. In addition, 12% who com- age companies, 22% said they raise mented said sales of beer and alcohol item for sources who commented, with prices when existing inventories are dropped because shoppers stocked up 25% each reporting it as both a resilient fully consumed, and 39% said they use before the October 1 price increase, and vulnerable food category. a combination of instantly raising prices while 6% said there was no impact to and absorbing price hikes, rather than sales due to price hikes. having a binary policy of either one. Indeed, 31% of sources who commented When asked about passing on price reported sales of daily necessities such hikes, 36% who commented said they as bread were resilient after price hikes, fully pass on price hikes to consumers, while 19% commented that discretion- another 36% said they use a mix of full ary items including alcohol, beer, coffee, and partial pass on strategies, 14% and tea suffered in sales volume. Instant said partially pass on, and 14% said ramen noodles appeared to be split corporate headquarters decides. between a necessity and discretionary Value. Shared.

Market Monitor Residential Building Trades – UK Solar Panel To gauge confidence in the UK resi- sustainability/energy improvements Demand – Europe dential building market and sentiment would see the biggest growth as among trades, Grassroots commis- people look to save money on their sioned interviews with tradespeople heating bills. One source said, “the focused on the residential/home sector that I am in—fitting doors and building market. When asked what windows—is very busy as people are their expectations of the residential/ trying to improve their home insulation. home building market were in general We have a four-month lead time on for 4Q 2022 vs. same period last year, fitting now, which is much higher than it 40% said the market was flat, while was a year ago. So, I think sustainabil- To track demand for solar panels another 40% said it was slowing, 13% ity/energy improvements will do well and types of inverters for residential, said slowing significantly. At the same in 2023, while new builds and larger industrial, and commercial use, time, 47% expect it to slow down in projects will suffer the most.” Grassroots interviewed solar panel in- 2023 vs. 4Q 2022 and 20% expect a 93% of sources said that inflation has stallers throughout France, Germany significant slowdown, while 27% expect affected the way they priced jobs in 4Q and Spain. Current demand for solar it to remain flat. 2022 compared to 1H 2022, and more panel installation vs. the same time The area likely to see the biggest than half who commented said they last year is up by more than 100% in growth in the residential/home build- pass the increase in material costs on Germany, the high double to triple ing industry is repair/maintenance for to customers, and one-third said they digits in Spain, and the high double nearly half of sources who commented pass increased labor costs on. digits in France, led by residential use, as customers look to save money by followed by industrial use and com- just doing essential work, and 40% said mercial use. One source in Germany commented, “we see current demand for residential, commercial, and industrial installations up 300% each. The war in Ukraine and the increasing Online Pharmacies – India power costs have led to an explosion in demand that we find hard to meet, Interviews with consumers in India who platforms is very high, with over despite having put together seven purchase medicine through either online 90% giving ratings of 4 or 5 to their new installation teams. While a or offline (brick-and-mortar) pharmacies most often used platform. Among those higher degree of energy-self-reliance revealed that penetration of online phar- who cited areas of dissatisfaction, “lower is desirable for all customer groups, macies is extremely high, with 85% having discount vs. peers” and “the process bringing down power costs is a used online pharmacies for purchasing of uploading prescriptions” were most question of survival for energy- medicine in the past 12 months. frequently mentioned. intense industries.” Convenience is the top reason for using When asked about discounts, sources Looking ahead, demand for solar online pharmacies, followed by more dis- reported the level of discounts offered panel installation is expected to counts vs. offline channels. Willingness to by major online pharmacies appear to increase in 2023 vs. 2022 by high continue using online pharmacies is very be similar—about 30% said the prices double digits in all countries surveyed, high, with 98% reporting they would do so. are 10%–20% less expensive than offline with residential use continuing to In addition, fast delivery and brand trust channels, while about 26%–31% said lead growth. A source in France said, are the top reasons cited for choosing a the prices are 20%–30% less expensive. “we expect current demand from preferred online pharmacy, with those Assuming discounts from online pharma- homeowners and professionals to that offer fast delivery standing out from cies come off to become comparable continue to trend up 100% and 75%, the competition. Overall, the majority are to offline channels, the majority would respectively, next year. The price of satisfied with the delivery time on their last still prefer to use online pharmacies. In electricity has increased at least 5% order with their preferred platform. addition, 76% of non-users are open to this year, and it is estimated it will using online pharmacies, mainly for the increase between 20% and 25% by Regarding product range and prices, advantage of discounting. 2030 from 18 cents per kilowatt to 25 satisfaction with major online pharmacy cents per kilowatt. We are seeing a (Cont. on page 3) 2

Market Monitor (Cont. from page 2) Independent Rehabilitation lot of interest from commercial and Hospitals – China industrial clients looking for either a self-sufficiency and resale solution or investment opportunity in large According to hospital managers while 27% expect it to stabilize, and 13% central projects. But the majority of interviewed in Huadong areas in eastern expect it to decelerate. Future demand business will continue to come from China, the average bed utilization rate growth is driven by the aging population residential clients who want to lower at the end of 2021 was 84%, and it is and high incidence of chronic disease. their utility bills, and with solar panels, expected to be 89% by the end of 2022 Meanwhile, 80% said the current bed this can be achieved to up to 50%.” and 93% by the end of 2023. The rate has supply is inadequate to meet demand. According to sources, cost efficiency been increasing due to greater market 60% said the sluggish economy has and reliability are the most important awareness of rehabilitation services, slowed new competition entering the factors in all countries surveyed reasonable treatment costs, and good market, and they expect competition to when choosing the type of solar patient outcomes. Sources expect remain stable, while 20% expect there to panel inverter across residential, revenue to see stable growth—up an be more competition, and another 20% commercial, and industrial end users. average 9% in 2022 vs. 2021 and 12% expect less. 80% of sources said stable The choice of the inverter type is in 2023 vs. 2022—driven by demand or less competition is positive, as it allows made by the installer for 100% of growth and improvement in the quality of existing players to maintain revenue sources in Germany and 67% each in rehabilitation services, balanced by price growth and achieve healthy margins. France and Spain, as they are best caps, competition, and patients’ ability to positioned to make a decision. afford treatment. An average 56% of residential As for demand growth, 60% expect the solar panel installations in Germany pace of independent rehabilitation hos- and 46% in Spain currently adopt pitals to accelerate in the next 12 months, string inverters with switchers, while 1% in both countries adopt microin- verters. In France, an average 78% adopt microinverters. Demand for Garmin Products – US At the same time, an average 65% of commercial solar panel installa- tions in Germany and 54% in Spain Grassroots interviews were conducted competitors and security breach issues. currently adopt string inverters with with dealers who carry Garmin products One source commented, “there’s not been switchers, while 54% in France adopt in the US to assess recovery prospects of much of a shift in Garmin’s mass-market string inverters with optimizers. Garmin’s declining product sales. 65% of appeal. What’s good is they have more Microinverters are rarely used for Garmin fitness-product dealers said sales low- to high-end models in terms of commercial installations use due to in summer 2022 were in line with expecta- cost options. They appeal to both those high cost and not being appropriate tions, while 25% said below, and 10% looking for a simple model or one that for large-scale solar installations. said above. Meanwhile, 90% of Garmin does neat tricks.” Indeed, 80% said there Microinverters for residential use are outdoor-product dealers said sales of were no significant changes in Garmin’s expected to reach an average 81% Garmin outdoor products in summer 2022 marketing its fitness products in the past penetration in France, 5% in Spain, were in line with expectations, while 10% six months. and 2% in Germany on the one-year said below. None of the outdoor-product At the same time, 50% of Garmin outdoor- horizon, and they are expected to dealer sources expect outdoor products product dealers said that they are not reach 84% in France, 11% in Spain, sales to decrease post-COVID as was the doing marketing for outdoor products and 5% in Germany on the three-year case with Garmin fitness products. currently, while the other 50% cited various horizon. Penetration of microinverters When asked about mass-market appeal, marketing activities including displays, for commercial use is expected to 65% of fitness-product dealers said the pamphlets, signage, digital ads, and remain low on both the one- and appeal of Garmin’s fitness products has events sponsorships. three-year horizons. remained the same in the last six months and 15% said it increased, while 20% said it decreased due to more ads from 3

Market Monitor About Grassroots Research® Grassroots® services are unique to Allianz Global Investors. The Grassroots Research® division combines in-house employees, a global network of over 300 independent, experienced journalists and Field Force researchers, and more than 50,000 industry contacts. We use this network to apply innovative market research and investigative journalism techniques to identify stock and sector trends before our competitors do. Advantages: Resources: • 30+ years of experience conducting • Access to thousands of consumers in customized investigative market more than 60 countries via targeted research around the world. online consumer and business panels. • Utilizes expertise of independent • 50,000+ industry contacts worldwide Research Specialist Grassroots journalists and Field Force Investigators from a wide range of industries, includ- Jasmine Breiding to reach sources on the ground. ing consumer, technology, healthcare, Grassroots® Market Monitor is published • Utilizes technological tools to target materials, industrials, energy and quarterly by Grassroots Research®, financials companies a division of Allianz Global Investors. consumer and business panels online Bockenheimer Landstraße 42-44 and to extract alternative data from • 300+ Field Force Investigators who 60323 Frankfurt am Main the Web. conduct quantitative market research Germany • Continuous exchange of information among consumers email: [email protected] between Grassroots® analysts and our • 60+ reporters who conduct interviews online: https://www.allianzgi.com/en/ capability-landing/about-grassroots- investment professionals. with industry experts research • Provides timely business insights via • In-house team in Europe and quick turnaround times. Asia Pacific Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested.[*] Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted. This material has not been reviewed by any regulatory authorities. In mainland China, it is for Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations and is for information purpose only. This document does not constitute a public offer by virtue of Act Number 26.831 of the Argentine Republic and General Resolution No. 622/2013 of the NSC. This communication’s sole purpose is to inform and does not under any circumstance constitute promotion or publicity of Allianz Global Investors products and/or services in Colombia or to Colombian residents pursuant to part 4 of Decree 2555 of 2010. This communication does not in any way aim to directly or indirectly initiate the purchase of a product or the provision of a service offered by Allianz Global Investors. Via reception of his document, each resident in Colombia acknowledges and accepts to have contacted Allianz Global Investors via their own initiative and that the communication under no circumstances does not arise from any promotional or marketing activities carried out by Allianz Global Investors. Colombian residents accept that accessing any type of social network page of Allianz Global Investors is done under their own responsibility and initiative and are aware that they may access specific information on the products and services of Allianz Global Investors. This communication is strictly private and confidential and may not be reproduced. This communication does not constitute a public offer of securities in Colombia pursuant to the public offer regulation set forth in Decree 2555 of 2010. This communication and the information provided herein should not be considered a solicitation or an offer by Allianz Global Investors or its affiliates to provide any financial products in Brazil, Panama, Peru, and Uruguay. In Australia, this material is presented by Allianz Global Investors Asia Pacific Limited (“AllianzGI AP”) and is intended for the use of investment consultants and other institutional/professional investors only, and is not directed to the public or individual retail investors. AllianzGI AP is not licensed to provide financial services to retail clients in Australia. AllianzGI AP is exempt from the requirement to hold an Australian Foreign Financial Service License under the Corporations Act 2001 (Cth) pursuant to ASIC Class Order (CO 03/1103) with respect to the provision of financial services to wholesale clients only. AllianzGI AP is licensed and regulated by Hong Kong Securities and Futures Commission under Hong Kong laws, which differ from Australian laws. This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors GmbH, an investment company in Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors (Schweiz) AG; in HK, by Allianz Global Investors Asia Pacific Ltd., licensed by the Hong Kong Securities and Futures Commission; in Singapore, by Allianz Global Investors Singapore Ltd., regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; in Japan, by Allianz Global Investors Japan Co., Ltd., registered in Japan as a Financial Instruments Business Operator [Registered No. The Director of Kanto Local Finance Bureau (Financial Instruments Business Operator), No. 424], Member of Japan Investment Advisers Association, the Investment Trust Association, Japan and Type II Financial Instruments Firms Association; in Taiwan, by Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan; and in Indonesia, by PT. Allianz Global Investors Asset Management Indonesia licensed by Indonesia Financial Services Authority (OJK). [*Subject to change – depends on the content of the material which may mention certain investment instruments that involve particular risk] The Grassroots Research® division of Allianz Global Investors commissions investigative market research for asset-management professionals. Research data used to generate Grassroots Research® reports are received from independent, third-party contractors who supply research that, as far as permissible by applicable laws and regulations, may be paid for by commissions generated by trades executed on behalf of clients. We believe these sources of information to be reliable and are providing the information in good faith, but in no way warrant the accuracy or completeness of the information. We have no obligation to update, modify or amend this document or to otherwise notify you in the event that any matter set forth in this document changes or subsequently becomes inaccurate. In addition, information may be available that is not reflected at this time. We accept no liability whatsoever for any direct or consequential loss or damage arising from your use of the information contained in this document. We and our affiliates, officers, employees or clients may effect or have effected transactions for our or their own accounts in the securities mentioned here or in any related investments. Any reference to a particular company shall not be considered an offer to sell, the solicitation of an offer to buy or a recommendation to buy, sell, or hold any security issued by such company. No part of this material may be i) copied, photocopied, or duplicated in any form, by any means, or ii) redistributed without prior written consent. 2644420 Copyright © 2023 Allianz Global Investors