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Russia Consumer Electronics Report Q4 2012
Business Monitor International, November 2012, Pages: 70
We project that Russian consumer electronics spending will grow by about 12% 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 compound annual growth rate 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. Meanwhile the market should receive a further boost following WTO entry, confirmed in August 2012, with import taxes of 5-15% expected to be lowered within three years.
Headline Expenditure Projections:
Computer Hardware Sales: US$10.4bn in 2011 to US$11.7bn in 2012, +8% in US dollar terms.
Forecast in US dollar terms downwardly revised due to macroeconomic factors, but tablets should be a strong growth area in 2012.
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$5.2bn in 2011 to US$6.1bn in 2012, +18% in US dollar terms. Forecast in US dollar terms downwardly revised, but sales of smartphones have been particularly strong and reversed a trend of declining handset prices.
Russia’s score was 52.1 out of 100.0, down slightly from the previous quarter. However, Russia moved up to second place in our latest Consumer Electronics Risk/Reward Ratings table from third, swapping places with the Czech Republic. Given its undoubted market growth potential, Russia is expected remain a priority market for vendors.
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.
- In H112, Russian retailers such as M.video and Euroset reported another half year of strong growth in sales of consumer electronics devices, with particularly strong sales of handsets.
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$800. Household purchases of second notebooks for family use was one factor contributing to this trend.
Executive Summary 5
SWOT Analysis 7
Russia Consumer Electronics Market SWOT 7
Russia Political SWOT 8
Russia Economic SWOT 8
Russia Business Environment SWOT 9
CEE Risk/Reward Ratings 10
Table: CEE Consumer Electronics Risk/Reward Ratings, Q412 13
Consumer Electronics Market 14
Table: PC Sales, 2008-2016 15
Table: AV Sales, 2009-2016 18
Mobile Handsets 23
Table: Mobile Communications, 2008-2016 23
Three Most Popular Models In Different Pricing Categories In MTS Retail Network Q311, % Of Total Units Sold 25
Electronics Industry 29
Table: Russia Electronics Industry, Key Metrics 29
Table: Electronics Output, 2009-2016 29
Table: Russia's Technology Park Expenditure, 2006-2010 (US$mn) 31
Table: Diverse Private Tech Firm Investment Boosts Silicon Skolkovo Dream 33
Table: Electronics Output By Segment, 2009-2016 35
Table: FDI Of LCD TV Set Manufacturers In Russia, 2006-2009 37
Table: Russia Electronics Components Industry – Development Plan 2008-2025 38
Industry Forecast Scenario 39
Consumer Electronics Market 39
Table: Consumer Electronics Overview, 2008-2016 39
Industry Developments 42
Macroeconomic Forecast 45
Table: Russia – Economic Activity 48
Competitive Landscape 49
Company Profiles 57
Depo Computer 57
National Computer Corporation (NCC) 60
Demographic Outlook 64
Table: Russia's Population By Age Group, 1990-2020 ('000) 65
Table: Russia's Population By Age Group, 1990-2020 (% of total) 66
Table: Russia's Key Population Ratios, 1990-2020 67
Table: Russia's Rural And Urban Population, 1990-2020 67
BMI Methodology 68
How We Generate Our Industry Forecasts 68
Electronics Industry 68
National Computer Corporation (NCC)