BMI View: We had downgraded our forecasts for the Venezuelan consumer electronics market in our Q4 2015 report to reflect the nature of the macroeconomic crisis the country. We have left our forecasts for the market un changed in our Q1 16 report update. We are now anticipating a modest recovery to take place in the market in 2016 as economic conditions improve. Nevertheless, we are cautious in our forecasts and hold the opinion that if the macroeconomic fundamentals of Venezuela deteriorate over the coming weeks, we will undertake another significant downwards revision of our forecast for our upcoming update.
Our previous downgrade was, however, relatively minor in the context of our pre-existing view for Venezuela to be the underperforming consumer electronics market globally. This view was based on devaluation and the impact on device affordability for local consumers where local wage inflation trails far behind device price inflation. Meanwhile, the push by the government to implement the 'fair price' law in H114, which restricted vendor margins to 30%, means vendors face continued political as well as economic risk factors. The law adds to a hostile business environment and exacerbates existing challenges for vendors, including currency weakness and economic, political and security risks that are weighing on purchasing power and consumer confidence.
Latest Updates & Developments
We made downward revisions to our forecasts in the Q415 update to reflect the economic climate of Venezuela. We have not made another downward revision to our forecast in our Q1 2016 report, but we may undertake another downward revision if the conditions remain negative for a longer period of time.
We have noted reports of serious shortages of hardware and consumer electronic goods as the local currency has devalued and imports have become a lot more expensive.
Many local manufacturers and producers have capitalised on the higher costs of imported goods and may look to this particular time as a unique opportunity.
|Economic Crisis Sees Devices Market Collapse|
|Consumer Electronics Spending Forecast By Segment|
|e/f = BMI estimate/forecast. Source: BMI|
The Venezuela Consumer Electronics Report has been researched at source and features latest-available data covering both the manufacture and sale of consumer electronics products, critically analysing - and forecasting - the market dynamics affecting each sub-sector, including audio-visual, computers, mobile handsets, gaming and automotives electronics. Furthermore, the report analyses the domestic and global economic trends driving device demand and provides company rankings and competitive landscapes covering leading multinational and national consumer electronics companies and analysis of latest industry news and trends in Venezuela.
BMI Research's Venezuela Consumer Electronics Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the consumer electronics industry in Venezuela.
- Benchmark BMI's independent consumer electronics industry forecasts for Venezuela to test other views - a key input for successful budgeting and strategic business planning in the Venezuelan consumer electronics market.
- Target business opportunities and risks in Venezuela through our reviews of latest industry trends and major deals, projects and investments.
- Exploit the latest competitive intelligence with company SWOT analyses.
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering consumer electronics, major investments and projects.
Consumer Electronics Market
Analysis of the size of the domestic market for electronics products, with in-depth assessment and data covering the dynamics driving each sub-sector; audio-visual, computers, mobile phone handsets and gaming devices, as well as demand for automotives electronics.
Analysis and data of the domestic electronics manufacturing sector. We assess the regulatory and business operational issues facing manufacturers - including openness to foreign investment, infrastructure, IP issues and the global demand context - and their impact on the production of electronics goods, which is again broken down via market sub-sectors.
Industry Forecast Scenario
Historic data series and forecasts to end-2018 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key risks to the main forecast, covering computers, communications and gaming devices. Indicators include:
Industry value (US$bn); population (mn); nominal GDP (US$bn); real GDP growth (%), GDP per capita, industrial production Index (% y-o-y ave.) unemployment % of labour force.
Business Environment Rankings
BMI's Consumer Electronics Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors and participants in the regional consumer electronics market. The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.