Peru Consumer Electronics Report Q3 2012

Peruvian sales of consumer electronics devices are forecast to grow 14% in 2012, with many of the trends that drove consumer electronics spending in 2011expected to continue in 2012. BMI believes that the Peruvian market has robust growth potential, particularly following the long-awaited ratification of the US-Peru Free Trade Agreement (FTA) in December 2011. Government-backed affordable computer programmes comprised an important market component. The implementation of digital TV broadcasting will drive demand for flat-screen TV sets. More competition in the mobile telecoms sector and expansion in rural areas should boost the mobile handset segment.
Headline Expenditure Projections Computer sales: US$738mn in 2011 to US$822mn in 2012, +11.0% in US dollar terms. Forecast in US dollar terms up due to macroeconomic factors, with most growth driven by consumer notebooks. AV sales: US$833mn in 2011 to US$912mn in 2012, +9% in US dollar terms. Forecast in US dollar terms unchanged, with flat-screen TV sets expected to provide the most dynamic development. Handset sales: US$466mn in 2011 to US$533mn in 2012, +14% in US dollar terms. Forecast in US dollar terms unchanged with smartphones the main driver, after imports rose 80% in 2011.
Risk/Reward Ratings: Peru’s score was 45.3 out of 100.0 with an Industry Rewards score of 36.7 being the lowest among its peer group. Peru is ahead of Argentina and Venezuela in our ratings . BMI expects rising penetration of consumer electronics devices such as smartphones and flat-screen TV sets.
Key Trends & Developments 􀂃 BMI expects spending on electronic lifestyle products such as flat-screen TV sets and smartphones to continue to rise in 2012 as the availability of credit improves across Peru. Private sector credit growth picked up strongly in January, to 15.6% y-o-y, in line with our view for credit growth to reach a strong 16% by year-end. Unemployment also remains anchored near record lows, which is good for consumption, as is the appreciating exchange rate, which is keeping households' purchasing power.
􀂃 In 2012, Peru's household PC segment will remain the main PC market driver, as Peruvian consumers become increasingly affluent, and forecast lower unemployment helps confidence. Peru's Free Trade Agreement with the US has reduced tariffs by up to 80% and is continuing to fuel IT investments.
􀂃 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 were expected to be available are Arequipa, Cusco, Trujillo, Piura, Chiclayo and Hancayo. Meanwhile, residents of Lima are scheduled to have access to eight additional TV channels by 2012. The start of digital terrestrial broadcasting is due to take place in 2014.