Fast Market Research recommends "Egypt Consumer Electronics Report Q1 2013" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 03/15/2013 -- BMI projects Egypt's consumer electronics spending will grow by about 11% in US dollar terms in 2013 to US$4.1bn. Spending on consumer electronics has remained a relative bright spot, despite the relatively weak employment backdrop. Strong remittances from Egyptians working in Saudi Arabia have helped to boost household spending but with a weak employment backdrop we expect a moderation in household expenditure in 2013.
Egypt is still expected to be one of the higher-growth consumer markets in the region over the next few years, although several constraints, including: low disposable incomes, economic disparities, low computer literacy and channel inefficiencies, could prevent the market from fulfilling its potential. Key factors behind the forecast growth in Egypt's consumer electronics sales include the emergence of a more affluent middle class and the growing acceptance of modern retail concepts.
Headline Expenditure Projections
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Computer hardware sales: US$1.0bn in 2012 to US$1.1bn in 2013, +5% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification. Computer penetration is forecast to rise from 10% to above 20% by 2017.
AV sales: US$377mn in 2012 to US$416mn in 2013, +10% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst modification, with flat-screen TV sets the main driver of growth. Handset sales: US$2.3bn in 2012 to US$2.6bn in 2013, +13% in US dollar terms. Forecast in US dollar terms remains unchanged, with aggressive promotions and China imports expected to result in continued price pressure.
Risk/Reward RatingEgypt's score was 39 out of 100, which gave it 10th place in our latest MEA CE RRR table. BMI expects Egypt to attain a higher ranking over time due to the growth potential of its market, particularly in regions outside of Cairo, where distribution and retail infrastructures are currently underdeveloped.
Key Trends & Developments
Flat-screen TV sets will be the main driver of Egyptian AV revenue growth as consumers upgrade and trade their old models for digital. TV penetration is at about 30% of the population and this is expected to increase to around 35% over the forecast period, creating momentum for organic growth. Egypt's growing population and the emergence of a more affluent middle class will also underpin an upwards market trajectory that should outpace GDP growth.
The Egyptian handset market is youthful and urban, with more than half the population under the age of 25. The market retains considerable untapped potential for segmentation. Slowing market growth has led to aggressively priced tariffs by operators Mobinil and Etisalat, keen on obtaining mass subscribers and boosting market share. In 2012, the government launched a crackdown on smuggled Chinese handsets which are believed to account for above 10% of the Egyptian market.
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