Russia Consumer Electronics Report Q3 2012

BMI View: projects that Russian consumer electronics spending will grow by about 13% in US dollar
terms in 2012, after Russian retailers such as M.video and Euroset reported another year of strong
growth in sales of consumer electronics devices in 2011. The Russian consumer electronics market is
expected to increase at a double-digit CAGR over BMI’s five-year forecast period, driven by the growing
popularity of digital lifestyle products like digital TV sets, notebook PCs, digital cameras and portable
audio devices. The planned roll-out of digital TV broadcasting to 95% of Russian citizens by 2015 and
investment in 3G and 4G mobile communications infrastructure will boost spending. Growth will be
slower in our forecast period, compared with the preceding five years, but rising computer penetration,
higher incomes and immense potential for spending by Russia''s more remote regions all provide longterm
grounds for optimism.
Headline Expenditure Projections
Computer hardware sales: US$10.4bn in 2011 to US$11.8bn in 2012, +14.0% in US dollar terms.
Forecast in US dollar terms was upwardly revised due to strong sales growth in Q112.
AV sales: US$7.6bn in 2011 to US$8.2bn in 2012, +8% in US dollar terms. Forecast in US dollar terms
unchanged, with flat-screen TV set sales the main growth area.
Handset sales: US$6.0bn in 2011 to US$7.0bn in 2012, +18% in US dollar terms. Forecast in US dollar
terms unchanged, but there is a large digital divide between urban centres such as Moscow, where mobile
penetration is more than 200%, and rural regions, where penetration is far lower.
Risk/Reward Rating:
Russia’s score was 52.8 out of 100.0 and it was in third place in our latest CE RRR table. Given its
undoubted market growth potential, Russia is expected to rise to a higher position in our tablet over time.
Key Trends & Developments
􀂃 The flat-screen TV set market still is far from saturated, particularly in remote areas. In the
major cities of European Russia, rising incomes, new house builds and interest in luxury items
will ensure growing demand for digital. The government has set a target for every Russian
citizen to have access to at least 24 digital TV channels by 2015, with the amount of funding for
digitalisation reportedly RUB76.3bn.Russia is expected to roll out digital services gradually,
starting from Russia’s Far East and South Siberian regions, followed eventually by all populated
localities.
Russia Consumer Electronics Report Q3 2012
© Business Monitor International Ltd Page 6
􀂃 Demand for smartphone and higher end feature phones will help prevent stagnation in the
handset market, despite the slowing subscriber growth rate. In Q112, smartphones accounted for
28% of all handsets sold at cellular provider MTS’s retail chain and 64.8% of sales in monetary
terms. By the end of 2011, smartphones accounted for around 18% of Russian handset sales by
volume.
􀂃 Tablets will offer a growth area in 2012, with a boost from sales in Q112 of around 1.5mn
tablets. Around 70% of tablets sold in the Russian market in 2011 were imports. Mobile PCs
remain the main PC sales driver, although most of the growth in Q112 was in less expensive
units priced below US$800. Household purchases of second notebooks for family use was one
factor contributing to this trend.