BMI calculates Colombian consumer electronics spending grew by about 12% in US dollar terms in 2012 to US$4.9bn. While an ongoing household deleveraging cycle weighed substantially on consumer electronics spending in 2012, we expect its negative impact on spending to slowly fade in 2013, particularly in H113. In 2013 BMI estimates recent broad improvements in consumer confidence point to stronger household spending over the coming quarters.
Falling unemployment should help to drive demand for consumer electronics goods, such as tablets and smartphones. A strong Colombian peso will also enhance the affordability of key consumer electronics items. Drivers will include rising PC and mobile phone penetration, the launch of digital TV broadcasting and 3G mobile network roll-outs. The development of a modern retail sector will also encourage growth over the forecast period.
Headline Expenditure Projections
- Computer Hardware Sales: US$1.5bn in 2012 to US$1.6in 2013; +8% in US dollar terms. Forecast in US dollar terms unchanged amid signs that consumer credit growth is bottoming out. Tablets are expected to be a growth area in 2013, amid overall slower growth in Colombian PC market, with strong uptake of the devices reported in 2012.
- AV Sales: US$2.3bn in 2012 to US$2.5bn in 2013; +9% in US dollar terms. Forecast in US dollar terms unchanged, with flat-panel and Smart TV sets the main growth area as consumers upgrade their old models.
- Handset Sales: US$1.0bn in 2012 to US$1.1bn in 2013; +12% in US dollar terms. Forecast in US dollar terms unchanged, with smartphones accounting for a higher proportion of mobile sales.
Colombia's score was 44.8 out of 100.0, giving it sixth place in our latest Latin American CE RRR table, ahead of Argentina and Venezuela. BMI expects rising penetration of consumer electronics devices such as smartphones and flat-screen TV sets. Over time the market has the potential to rise in our rankings.
Key Trends & Developments
- The government's Vive Digital programme offers a long-term boost to the PC market, with a pledge to eliminate import tariffs on connectivity devices and to take measures to enhance credit availability for such devices. Incentives under the Vive Digital plan included a VAT exemption programme for lowincome households looking to obtain an internet connection.
- The migration to digital TV broadcasting is currently scheduled for completion in 2019, although government sources have suggested this could be brought forward by two years. To maintain revenue growth in the face of price declines, vendors will focus on product innovation, with drivers including improved display quality and wider screens, as well as design and features, such as wireless technology.
- With the growing popularity of mobile broadband services, and recent launch of 4G services by Movistar and Claro, smartphone usage should grow rapidly, as average prices fall. There will also be increasing demand for mid-range phones as consumers upgrade from their entry models. Even for lowtier subscribers, desire for features such as cameras and support for MP3/MP4 are increasingly important requirements.