Discover the latest market trends and uncover sources of future market growth for the Consumer Electronics industry in Spain with research from Euromonitor's team of in-country analysts.
Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.
The Consumer Electronics in Spain market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Consumer Electronics in Spain?
- What is the fastest growing product category?
- What consumer electronics segments are growing the fastest?
- What are the major technology trends in new consumer electronics products?
- How has the economic downturn shaped consumer purchasing behavior when it comes to consumer electronics?
- How has the economic downturn shaped consumer purchasing behavior when it comes to consumer electronics?
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This industry report originates from Passport, our Consumer Electronics market research database.
The Spanish economy remained in recession during 2010. Real GDP declined by 0.15% due to the economic slowdown caused by a collapsing property market and the credit crunch, making consumers cut spending. Consumers marginally reduced spending on audio-visual, photographic and information processing equipment, whereas they slightly increased expenditure on telecommunications equipment. Unemployment went up, reaching 20% in 2010. Spanish debt was downgraded from AA+ to AA (under warranty), with a negative outlook forecasting prolonged recovery.
The credit crunch and the lack of liquidity in Spanish housing are causing more and more problems, keeping consumers away from the shops, bolstering forecasts for the economy to remain in recession.
Consumer expenditure on audio-visual, photographic and information processing equipment rose by 1% to reach around EUR7,207 million in 2010. Spaniards were more willing to buy telecommunications equipment, which was driven by the development of 4G technology and recent launches of new smartphones, with spending of EUR1,174 million in 2010, which was 0.4% more than in 2009.
Trying to improve the sovereign fiscal situation the Spanish government introduced a VAT increase in July 2010, raising it from 16% to 18%. As a result of the measure, consumer spending on consumer electronics increased slightly before July 2010, because Spaniards were afraid of the imminent big price hike in the sector and cut down overall spending on consumer electronics during the second part of the year.
Spain slumped into its worst recession at the end of 2008 as a consequence of the global financial crisis and collapsed property market. Unlike other European countries Spain is still struggling and was not thought likely to start to see a recovery before the middle of 2011. As a result of the property crash the economy contracted and around two million people lost their jobs. Real estate remains the key sector in the economy, responsible for jobs and economic growth, although the current situation casts doubt on the quick recovery, suggesting that the economy will not resume growth until the middle of 2011.
The Spanish government was implementing austerity measures to improve the economy by cutting civil service wages by an average of 5% and freezing them throughout 2011. The intention to increase the retirement age from 65 to 67 years has been discussed as part of the austerity measures by the government for a long time, but was opposed by trade unions and marked by strikes and demonstrations at the end of 2010. Pension reform was approved at the beginning of 2011, aimed at bolstering public finances and helping the economy to avoid the need for a bail-out, averting a similar scenario to those of Greece and Ireland.
Despite the austerity measures the unemployment rate remained high at 20% in 2010 – the highest unemployment rate in the Eurozone. Immigrants are the part of the population that experienced the heaviest job losses due to the increased unemployment levels.
The consumer electronics market will continue declining in 2011, down by -6% in volume and -7% in constant value terms to 49 million units and EUR11.8 billion. Almost all areas of consumer electronics will experience further decline, except the categories of mobile phones and portable consumer electronics, in which volume sales will go up by 2% and 1%, respectively, in 2011. Product performance in the subcategories of smartphones, tablets and HD camcorders look particularly promising due to the strong performance of such brands as Apple and Samsung.
The austerity measures, which included pension reform, cuts in civil service wages and an increase in the VAT rate, the unemployment rate will remain high, demonstrating only a marginal decrease. After shrinking, the Spanish economy is expected to start to see a slow recovery by expanding by 0.6% in 2011 and reaching real GDP growth of 2% by 2014. The unemployment rate is forecast to fall to 16% by 2014.
Unlike previous forecasts, the Spanish economy is projected to recover more slowly over the next five years. The sluggish recovery will be accompanied by cuts in public spending and the budgets of the government ministries, which are expected to be reduced by 7% and 15%, respectively.
The ongoing Plan Renove initiative is a programme introduced by the Spanish Ministry of Industry, Tourism and Commerce in 2009 aimed at reversing falling consumer demand in the Spanish market. The programme consists of loans provided at low interest rates with repayment conditions of 5-12 years. The programme’s objective is to mitigate the negative impact of the financial crisis and to enhance consumer demand in different sectors, including consumer electronics, consumer appliances and the automotive industry, the performance of which affects the sales of in-car entertainment devices.
The extension of Plan Renove throughout 2010 could help to reverse the collapse in consumer demand for electrical and consumer appliances throughout the country. Despite the slump in the housing market and the credit squeeze on households some product categories demonstrated signs of recovering volume sales. Using the plan retailers and manufacturers were offering rebates on energy-efficient electronic devices so that consumers could exchange at a discount old consumer electronics and home appliances for the latest models. The new models were offered with discounts, intending to boost the sales of televisions and home cinemas with a smaller environmental footprint.
Plan Renove also supported initiatives connected with energy savings, improving the quality of control systems and investment in new technologies.
Plan Renove targets mainly energy-consuming appliances and electronics in homes, eg televisions, fridges, cookers and washing machines. Out of the total energy consumption, 55% is related to electrical appliances and electronic devices, 28% to consumption in kitchens, 14% to offices and the remainder to small air conditioning devices.
The amount of discounts varied depending on the region. The presence of manufacturing facilities in the region pushed regional governments to increase the amount of discounts that were offered during purchasing. Consumers in the Basque Country, Aragon, Cantabria and Valencia received larger rebates to stimulate falling demand. The majority of the rebates were used to replace consumer appliances, televisions and home cinemas because they form the group of products with the highest level of energy consumption.
The terms of Plan Renove also vary depending on the retailers and companies, for example one of the major retailers El Corte Inglés was offering EUR150 for old televisions when purchasing a new product. To promote the use of its online shop the offer was valid only for purchases made via its internet store. Hewlett-Packard launched Plan Renove offering EUR75 rebates for purchasing printers from the Photosmart, Officejet and Officejet Pro ranges.
The Plan Renove can be extended depending on the available budget. Due to the collapse of the housing sector, falling consumer confidence and high unemployment rates, the measures taken by the government are not sufficient to boost sales in the sector. However, they improved the situation in some areas, positively affecting sales in some consumer electronics categories, particularly televisions.
The scrappage programme Plan 200E, which was launched in May 2009, aimed at promoting the replacement of old vehicles with modern vehicles. Apart from removing inefficient high-emission vehicles, it also stimulated the automobile industry in general, supporting the sales of in-car electronics. The programme was extended until the middle of 2010, raising car sales and positively affecting the sales of in-car entertainment devices. However, the category experienced a sharp decline in sales starting from the middle of 2010 due to the end of the scrappage programme and the VAT rise from 16% to 18%.
The initiative Plan Renove will be continued until the end of 2012, although the possibility of offering rebates for consumer electronics will depend on the budget of the programme and the economic priorities of the country.
Plan Renove increased consumer awareness of energy-efficient products. Since many people are currently concerned about high electricity bills and are thinking about ways to reduce household expenses, products with reduced energy consumption are the references that are going to shape the strategy of the leading manufacturers over the forecast period. Energy-efficient products can help to reduce energy by up to 50% in a given household and can therefore be a good way to cut expenses by buying new consumer electronics products.
The Plan 200E scrappage programme will be replaced by a EUR590 million programme launched by the Spanish government targeting the sale of up to 70,000 electric vehicles in 2011-2012, which will drive the sales of in-car electronic devices. Drivers purchasing a new electric car will be rewarded with up to EUR6,000. The scheme of the plan comprises measures to boost demand and will increase consumer interest in in-car entertainment devices.
Plan Renove raised consumer awareness of eco-friendly issues and consumers are expected to choose energy-efficient gadgets and the proliferation of energy-efficient and green products will be more visible.
In 2010, Spain ranked seventh in Europe in terms of internet users, and 18th in the world. In June 2010 over 29 million Spaniards were connected to the internet, compared to other European countries such as Germany, the leader, with 65 million people with connection to the internet.
Spain shows an above-average level of internet penetration with 62.6% of its population connected to the internet. The internet penetration in Spain has experienced sharp increases since 2000, growing by 440% since that year, demonstrating a faster growth rate than the European average of 352%. Spain accounted for 6.1% of Europe’s internet users over the review period.
Internet penetration was growing at an annual rate of 10.0% over the review period, but a slight slowdown was noted between 2009 and 2010, when it grew by 6.9%. During the forecast period a continuously lowering growth rate is expected – starting with 5.6% between 2010 and 2011, falling to 3.6% between 2014 and 2015, and, finally, 2.1% between 2019 and 2020, due to the increasing penetration rate leaving little room for spectacular growth.
Broadband internet subscribers in 2010 reached 10 million in Spain. The period between 2000 and 2005 was marked by rapid growth of broadband internet subscribers, averaging 30%. However, during the last few years the growth rate slowed down and the number of new subscribers grew at a rate of 7.2% between 2009 and 2010 and is expected to continue to experience a similar slowdown trend to 2015 (1.9%) and 2020 (0.9%).
The possession rate of computers reached 63% in 2010. Around 51% of the computers in Spanish households are desktop models, although they are gradually losing share, demonstrating annual volume losses of 3% to the benefit of laptops, which saw its share go up by 8% in 2010. A breakdown of broadband connection type gives a share of 75% to ADSL and 17% to cable connection. The reason for not installing a broadband connection was its high price and absence of the need, according to the INE data.
The proportion of children between 10 and 15 years old using all forms of information technology increased in 2010, driving the overall use of PC and internet utilisation.
All major telephone providers offered fixed phone and ADSL broadband bundles, with wi-fi charged at an extra cost. The phone lines typically operated on VoIP (voice over internet protocol, basically over the internet) and as such offered free national calls. Three different speeds of ADSL would also most commonly be on offer and most promotions included installation costs and even gave a discount for a certain period of time. For example, in 2010 Vodafone had offers starting from EUR29.90 per month, although this price would increase after the promotional offer expired, rising to EUR35.28 per month. There was also the possibility to purchase a bundle, which additionally included TV channels if the cable infrastructure was in place. For example, ONO offered telephone with internet (12MB download) and TV for EUR24.90 per month.
The number of PCs in households rose rapidly due to the growing demand from the younger generation between 15 and 24 years old. The older age groups also quickly started learning to navigate the internet, driving up the demand for personal computers and acquiring new skills that are helpful in the labour market.
Computers will become more affordable, as will internet subscriptions. More and more households will have several computers at home consisting of a relatively old desktop and at least one laptop used by the younger members of the household. Sales of PCs will be positively affected by this change in consumer habits.
The number of internet users will go up and more people will know how to download music, movies and applications for free or at discounted rates. Consequently, sales of music and movies are set to decrease over the forecast period. Internet commerce will increase and online shopping will be heavily promoted by leading retailers through attractive sales deals.
In 2010, ownership of mobile phones reached 92.3% of all households, which increased from 90.9% over the review period. In total, 54 million mobile phone subscriptions were registered in 2010 in Spain, which was the equivalent of 1.2 phones per person.
Lots of e-readers were launched in the market. Most of them are using a variant of e-paper and are wirelessly connected. The more affordable models have only wi-fi, while the more expensive products like Kindle e-reader use 3G connections.
The growing number of mobile phones is explained by the increasing number of people with a private phone and a work phone. Consequently, the proportion of mobile phone revenue in total telecom revenues grew at a CAGR of 6% over the review period.
The latest trend in mobile phones is smartphones, including the iphone or similar types such as those manufactured by Sony Ericsson, HTC or Samsung (most notably the C3050). A number of factors made consumers buy the iphone over other smartphones, including sleek appearance and the ease of use, which is supported by the Mac operating system (iOS), although significant competition came with the launch of the Android operating system in 2010 by Google.
The iphone managed to capture 10% of volume sales with continued positive growth throughout 2010. Touchscreens were the priority in mobile phones together with internet access enabled by wi-fi or directly from the mobile phone network. The growing popularity of social networks, eg Facebook and MySpace, allowed users to stay in touch with friends and colleagues and to be regularly updated.
E-readers was the one of the fastest-growing subcategories in consumer electronics, increasing its sales by 61% in 2010 in volume terms to reach 157,780 units. The growing demand for e-books has been supported by the creation of a distribution platform for Spanish content accepted by major publishing houses in Spain. Leading book retailers get connected to the distribution platform Libranda for e-book promotion and sales.
Competition between the major mobile network operators Movistar (Telefónica), Vodafone and Orange (France Telecom) has become stronger. It is mainly based on the type of phone the operator offers for free when agreeing a subscription for a 12-month or 18-month contract. The packaged deals offer the same range of products, which is either landline and ADSL plus optional TV services or mobile phone contracts.
The popularity of text messaging increased over the review period, despite the relatively high average cost of a message, which was EUR0.13 in 2010. Built-in mobile applications also experienced growing demand, which was supported by instant messaging options offered by Facebook, Skype, Google Chat and Instant Messenger. New phones now have increased storage capacity and better sound and visual quality, which is resulting in increased downloading of ring tones, music or news alerts offered by providers.
Over the review period, mobile phone contracts were basically indistinguishable from one company to another, the only incentive to change to a new company was the new phone they would provide as a gift. Therefore consumers were not particularly loyal to their network provider and they were quick to switch to a new phone, which is usually bundled with some discount on their phone bill for a limited time given as an additional incentive. Phones or netbooks could also be purchased with accumulated loyalty points.
The market for mobile phone contracts currently amounts to 2.8 billion in Spain, out of which 65.0% are covered by mobile phones paid by monthly contracts, 0.1% is covered by the pay-as-you-go option and 34.9% is attributed to the mobile phones only.
The market for mobile handsets dipped, with the exception of very popular phones such as the iphone. Network operators were cannibalising the market for mobile phones, benefiting from relatively high cost per minute that increased by 12.5% year-on-year.
Due to the increased usage of mobile phones, landlines will be losing importance in people’s personal lives. By 2020, 98% of all households are expected to have a mobile phone.
Over the forecast period consumers will be reluctant to acquire a fixed phone unless it comes with an ADSL package, which often includes a free house phone and free national phone calls to other fixed phones. Corporate clients will remain the main subscribers for landlines, although corporate mobile phones will retain their popularity, offering companies an incentive to consider alternative working models, such as working from home and flexible working hours.
E-reader volume growth will slip to 5% in 2011, although it will still remain an attractive market area for the producers of electronic readers. The total literature book market is valued at EUR1.3 billion, of which e-books currently have a 1% share of the total market. Given that out of the 47 million people living in Spain 55% are active paper book readers, the market for e-books has potential for further growth.
The recession affected distribution channels in the Spanish market. Specialist and mixed retailers continue offering high-quality products and the latest product models, albeit often at a higher price compared to their competitors in hypermarkets. Since the Spanish market is being characterised by declining consumer confidence shoppers are looking for cheaper and affordable product options, meaning that the market share of specialist retailers is therefore likely to shrink over the forecast period.
The group of leading specialist retailers in the consumer electronics market include Miró, Media Markt, PC City, and Saturn. At the end of 2010 specialist retailers Media Market and Saturn, both belonging to the Metro Group AG, reported joint sales of EUR1,793 million for 2010, which demonstrated a 2% increased on the previous year. The number of outlets of the retail chain increased from 61 to 64 in 2010.
The rest of the big specialist retailers faced difficulties and could not overcome problems caused by the declining consumer demand. The Spanish government’s Plan Renove helped to improve the situation slightly, marginally increasing value sales in the first part of the year in some subcategories. Under the plan consumers were able to get rebates when buying the latest models featuring energy-efficient characteristics if they handed in old electronic devices such as televisions, home cinemas and printers at the same time.
Despite these efforts two leading retailers Miró and PC City had to reduce the number of their stores by the end of 2010. Spanish specialist retailer Establecimientos Miró was founded in 1971 and now has more than 150 stores across Spain. In 2009, the turnover of the company was EUR348 million, which exceeded the turnover in 2008 by 5%. Despite the recession the retailer was following a strategy of expansion, opening new type of stores under the name Mega Miró, which were opened in Zaragoza, Barcelona and Lleida. However, a prolonged recession in the Spanish consumer market resulted in accumulated debt of EUR180 million at the beginning of 2011, suggesting the need to restructure the company and close or sell around 30 outlets.
Another retail chain, PC City, owned by the British group Dixon Retail and specialising in computers and peripherals, experienced declining sales and is considering leaving the Spanish market due to the weak consumer demand. To maintain its market share PC City carried out a promotional campaign offering a 15% discount on the majority of products.
The mature consumer electronics market is characterised by fierce competition among specialist retailers offering attractive promotional deals trying to capture consumer attention. The number of specialist retailers is expected to decrease and the leading players will capitalise on such commercial opportunities, expanding their business activity through opening additional outlets.
Internet retailing accounted for just over 4% of retail volume in 2010 and is set to see further gradual growth over the forecast period. As the share of electronics and appliance specialist retailers is set to fall it will be balanced out by the growing share of internet retailing, which is being expanded by the opening of online shops belonging to the existing retail chains and independent internet retailers.
Hypermarkets, such as Carrefour, Al Campo and Eroski, accounted for 5% of consumer electronics sales in 2010. Unlike specialist retailers hypermarkets offer electronic products at lower prices and stand to gain share in a prolonged recession forecasted to continue impacting Spain.
Since the Spanish market is unlikely to demonstrate strong signs of recovery over the forecast period no significant changes are expected in the distribution of consumer electronics.
The market share of hypermarkets will see marginal increases, capitalising on increased consumer demand for cheap products. Hypermarkets will continue to compete with specialist retailers and other distribution channels on price. Most of the leading players such as Carrefour have already opened online shops and have been successfully selling electronics products.
Media Markt and Saturn are among the few leading players that have not yet introduced internet sales. The two retail chains belonging to the Metro Group AG worked out an agreement to follow the strategy of a multi-channel approach and are likely to open an online store through purchasing an existing internet platform such as Redcoon.