LONDON--(BUSINESS WIRE)--Technavio’s latest report on the consumer electronics market in Romania provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
According to Brijesh Kumar Choubey, a lead analyst at Technavio for retail goods and services research, “Increase in disposable income of consumers, launch of new products, and revival of the global economy has boosted the growth of the consumer electronics market in Romania, which has resulted in a projected CAGR of close to 13% of the market during the forecast period. The demand for consumer electronics has increased despite a rise in the average unit price of electronic products over the past five years.”
The top three emerging trends driving the consumer electronics market in Romania according to Technavio research analysts are:
- Growing popularity of e-commerce
- Rising demand for wearables
- Increase in consumer spending
Growing popularity of e-commerce
The e-commerce industry in Romania doubled in 2014, generating a revenue of USD 1.50 billion. Internet penetration is increasing in Romania, which is expected to boost online sales of products, including consumer electronics. In 2014, Internet users in Romania totaled approximately 10 million, out of a total population of 19.7 million. The low share of e-commerce in retail (2%-2.5%) is expected to change rapidly over the next five years as consumers get more accustomed to online purchases. Currently, the fashion and shoe segment accounts for 37% of online purchases, followed by the IT and electronics segment with 33%. Online sales of consumer electronics are also expected to increase in the near future because of online discounts and schemes. They also provide the convenience of products being delivered at the customer’s doorsteps. Romania also has the advantage of faster broadband speeds of more than 55 Mbps, which is expected to boost online sales.
Rising demand for wearables
The wearables market in Romania grew by 35% in 2015, compared to the previous year. The wearables market includes smartwatches and bracelets that monitor the wearer’s physical activity. In 2015, the market for wearables was less than 50,000 units, and it is expected to grow at an annual rate of 15% till 2020. One of the major factors contributing to this growth is increase in health consciousness. For instance, Romanian IT&C manufacturer, Evolio, launched a smartwatch named x-Watch, which can be connected to users’ smartphones to make calls or text. It can also be used to monitor physical activity. Since this watch is manufactured domestically, it is priced lower than the smartwatches offered by major electronics players such as Samsung and Apple. Similarly, Vector Watch, a Romanian start-up founded in 2014, also launched smartwatches under the brand name Vector in 2015. The planning and designing of these watches was carried out in Romania. The software and hardware platforms were also developed in Romania. In 2015, the smartwatch market was valued at USD 5.58 million, and this is expected to double by 2016.
Increase in consumer spending
In 2015, the Romanian economy grew by 3.5%, compared to 2.8% in 2014. This growth is well above the EU average. Post 2010, economic recovery in the country was initially driven by exports, but since 2014, the economic recovery has been driven by rise in domestic consumption. The household final consumption expenditure grew the fastest in 2014 due to increase in wages. Labor wages grew by 5% in 2014, and by 4% in 2015. In addition, a reduction in VAT has also resulted in a reduction in inflation, reducing the prices of products further. Investments in the manufacturing sector are also expected to rise due to higher confidence level of investors. For instance, Asus, a Taiwan-based company, is expected to expand its smartphone business in Romania. These factors are expected to make products such as consumer electronics more affordable.
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