Pakistan Consumer Electronics Report Q3 2012

BMI expects the Pakistan consumer electronics market will grow by around 9% in 2012, with a slightly improved macroeconomic climate supporting sales of flat screen TV sets, PCs and smartphones. The Pakistani consumer electronics market has considerable potential, but this is constrained by a large grey market, poor IP protection, an unstable economic and security situation, and weak distribution channels. Reforming high national and provincial taxes and tariffs on products ranging from computers to prepaid mobile cards would boost the market.The long-term market drivers include a rising population and growing affordability and demand for consumer electronics goods is also influenced by trends from
Middle Eastern markets. Headline Expenditure Projections Computer sales: US$309mn in 2011 to US$328mn in 2012, +7% in US dollar terms. Forecast in US dollar terms upwardly revised, despite a high level of illegal imports.
AV sales: US$645mn in 2011 to US$703mn in 2012, +9% in US dollar terms. Forecast in US dollar terms unchanged, with the main driver being demand for flat-screen TV sets.
Handset sales: US$750mn in 2011 to US$816mn in 2012, +9% in US dollar terms. Forecast in US dollar terms upwardly revised, but most handsets are sold at less than US$50.
Business Environment Rating: Pakistan’s score was 28 out of 100.0, with low CE market and Country Structure ratings dragging down high Potential Returns. Pakistan took thirteenth place in our latest RRR table, but has potential to rise over time due to the size of the market.
Key Trends & Developments 􀂃 The TV sets segment is forecast to grow at a CAGR of about 12% as consumers replace black and white, and analogue sets with colour and LCD models. About 49% of TV sets sold each year are still black and white. If the government is unable to crack down on smuggled goods, growth could be slower than this.
􀂃 PC vendors must contend with a significant segment of demand being met by imports of used computers from countries such as China. The government has denied reports it plans ban imports of used computers, which is a measure strongly opposed by local retailers. The price differential between an imported second-hand computer and a new one is considerable, according to local importers.
􀂃 In 2012, established brands will hope to regain some market share as a result of the government’s recent ban on imported handsets without IMEI numbers. According to retailer reports, the ban has hit sales of low-cost Chinese handsets, although the long-time result is still unclear. Chinese vendors are likely to react quickly to the new circumstances. Meanwhile, established vendors are targeting the low-price tier with products offering dual-SIM support and other features that have proved popular for the low-cost brands.