High import tariffs and taxes rule luxury portable consumer electronics to hit bottom low-Brazil: Ken Research – IT Voice | Online IT Media

High import tariffs and taxes rule luxury portable consumer electronics to hit bottom low-Brazil: Ken Research

Transaction of luxury portable consumer electronics remained inconsequential in Brazil over the review period. These products lack both distribution and demand. While the status of smart phones is soaring, there is little concentration in luxury variants, with those seeking to buy such products being more likely to do so in a foreign country. TAG Heuer, a strong global player in luxury portable consumer electronics, is present in Brazil but opts to hub exclusively on watches and eyewear in the country.
According to the market research report “Luxury Portable Consumer Electronics in Brazil”, in Brazil, the market for luxury portable consumer electronics is very small. There is no demand for the products as well as there is a lack of a properly established distribution network in the country. Even though the smartphones market is growing rapidly, the luxury variants have experienced a lack of demand from the consumers. Electronics sector in Brazil suffers from a major shortcoming in the form of high import tariffs and taxes. The luxury electronics sector in the country is adversely affected by the high tax and tariffs. In Rio De Janerio, a Samsung Galaxy S4 was priced at more than $1100 while it was available at a price of $630 in USA in 2014. As a result, most of the consumer prefers to buy luxury portable electronics while going on an overseas trip because sometimes the cost of travelling and buying luxury products from a nearby country is less than the cost of the product in the country.
The brands that have a strong presence in the country are only focusing on their other products lines apart from luxury portable consumer electronics. TAG Heuer is one such company, which is a well-known brand in the country and is globally selling luxury portable consumer electronics but in Brazil, it wants to only sell watches and eyewear. The black-market in the country cuts into the market size of the industry as it enables the consumer to buy the products at a much lower price as compared to the selling price in the market. The high-income consumers seeing the slow growth of the Brazilian economy are making luxury purchases cautiously.
In 2016, the already small luxury sector had recorded a further mellow growth. The traders have been reducing the number of features of a product or lowering its qualities to make the cost come down but it has led to a decline in gift purchases. There are many restrictions that are imposed by the government or otherwise which do not let new companies enter the market easily. This is expected to raise the market concentration. This provides a huge market opportunity for the existing companies to grow and expand. Internet selling is still the mass preferred channel but the premium outlets are also gaining popularity because the consumers like to see the luxury products before buying them. The luxury shopping centre will continue to attract many consumers. It is anticipated that in 2017, the economy would recover and the faltering Brazilian economy would start growing.
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