Philippines Consumer Electronics
Consumer electronics spending in Philippines is expected to reach $8.1 billion by 2024.
Philippine consumer electronics market spending from 2020-2024 should reach $8.1 billion and spending in 2020 alone should be around $6 billion. The most popular subsectors would include mobile handsets, computer hardware, and audio-visual devices. Many favorable factors have poised this industry for continued growth. The first would be that the Philippine economy has been consistently growing for years and that 60% of its population is under 23 years old. A new middle class is also emerging, and an estimated 1.5 million households will reach an income of $25,000 by 2024. This group will purchase consumer electronics for the first time, and is eager to own mobile devices, televisions, and possibly computers.
The mobile device market is the largest, making up over 55% of all consumer electronics related spending. About 44 million of the 100 million population own smartphones, and a CNN report noted that Filipinos spent an average of 10 hours online a day, much of it on social media. Long commute times and computer-based work likely are significant contributors. Even for those who do not have smartphones, mobile phones are a necessity and are used to send and receive money for the unbanked population. Computer hardware sales will increase as more first-time computer owners emerge. The phasing out of Microsoft 7 (which still accounts for 30% browsing traffic) will induce new purchases. The audio-visual segment will see growth with more users buying their first flat-screen televisions. The analog switches off will also promote further purchases.
The actual purchasing power for the nation as a whole is distorted by the $33 billion in remittances that enter the country. A unique challenge of the Philippine market is over reliance on mobile devices. Due to the mobile device sector being so strong, there is limited demand for other consumer electronic products, including cameras, printers, computers, and gaming consoles. As mobile devices can perform many functions, getting consumers to purchase products with seemingly redundant features will be more challenging. Differentiating products and features and setting appropriate pricing is essential.
The challenges in the Philippines include a lack of cell coverage due to limited towers and the slowest Internet in Asia. The newly formed Department of Information and Communication Technology (DICT) Department is working to address such challenges with a Broadband Plan, a new Common Tower Policy, and the introduction of a third player in the telecom market. There is hope that such reforms will improve infrastructure to enable more powerful utilization of consumer electronics. Firms interested in entering the market would need to find a local partner or distributor. Commercial Service Philippines can assist with this process.
For more information, please contact Commercial Specialist John Giray.