We expect a modest acceleration of GDP growth for Peru in 2014 of 4.9%, up from our downwardly revised forecast of 4.8% in 2013. This is good news for the consumer sector, which accounts for nearly two-thirds of the Peruvian economy, and is expected to grow more quickly than the rest of the economy, at 5.0% in 2014. This is slightly lower than the average growth rate over the previous decade of 6.0%, as purchasing power will be limited by a weaker domestic currency following a depreciation of the Peruvian sol from the beginning of 2013. Nevertheless, this growing consumer story underpins our view that Peru will remain one of the more dynamic markets in Latin America over our forecast period. Economic growth is relatively broad-based compared to some other regional markets, boosting consumption of devices such as notebooks, tablets, smartphones and flat-screen TVs. BMI forecasts consumer electronics sales to grow by 10.6% in 2014, backed by a rise in consumer spending and low penetration of devices such as PCs and smartphones. The launch of 4G LTE by Movistar in January 2014 should boost sales of mobile handsets at the higher end of the market.
Headline Expenditure Projections
Computer Hardware Sales: US$781mn in 2013 to US$870mn in 2014, +11.4% in US dollar terms. Growth momentum exists in desktop and notebook sales, but it is tablets that will outperform and take a growing share of the market.
AV Sales: US$998mn in 2013 to US$1.052bn in 2014, +5.4% in US dollar terms. Forecast in US dollar terms upwardly revised, with flat-screen TV sets expected to provide the most dynamic development.
Handset Sales: US$619mn in 2012 to US$855mn in 2014, +16.4% in US dollar terms. Smartphone and featurephones will continue to take a larger share of sales as incomes rise at the same time as average device prices are declining.
Key Trends & Developments
- In 2014, Peru's household PC segment will remain the main PC market driver due to a low household PC penetration rate, some distance behind that of Latin American neighbours such as Chile and Brazil. The low penetration means vendors can target first-time buyer and upgrade/replacement markets as a source of growth. While the overall PC market has a bright outlook, it should be noted desktop and notebook vendors are being squeezed by increasing competition from tablets, which are becoming more powerful, and more affordable now Android and Microsoft Windows based devices offer a genuine alternative to premium Apple products.
- Sales of smartphones will have the fastest growth rate at 41.2% in 2014. The launch of Firefox OS in collaboration with Telefonica and ZTE, has seen the price of smarpthones drop to below US$100 and the improving quality of 3G internet access should create more demand.
- The start of digital terrestrial broadcasting is due to take place in 2014. The introduction of digital TV at the provincial level should stimulate demand for flat-screen TV sets in these markets. The first cities where digital TV services are expected to be available are Arequipa, Cusco, Trujillo, Piura, Chiclayo and Hancayo. Residents of Lima had access to eight additional TV channels by 2012.