Wearables market evolves in Brazil
Sales of wearables are seeing a steady increase in Brazil and the local market is becoming more sophisticated, according to research from analyst firm IDC.
During the first three months of 2019, some 87.974 items such as fitness bands and smartwatches were sold, an increase of 51.6 percent in relation to the first quarter of 2018.
Some 241 million wearables were sold in 2018, a 44.2 percent increase in comparison to 2017. According to IDC, the segment is gathering momentum in Brazil, with large manufacturers investing in developing their offerings and more consumers interested in buying the devices.
Of all the wearables sold last year, IDC notes that 110.400 were basic gadgets with functionality such as step counting, while 130.900 devices were more sophisticated offerings with features such as glucose and heart rate monitoring.
"The market is becoming more structured, with 'smarter' devices having more significant representation in relation to basic gadgets such as fitness bands," says IDC Brazil analyst Renato Meireles.
The high price of wearables in Brazil was a key point noted in the IDC report. With an average ticket in Q1 of 1069 reais ($284) for basic models and 2156 reais ($572) for more advanced versions, the gadgets are still limited to consumer audiences with greater buying power.
According to IDC, high prices are usual for new products such as wearables, where specific components are used and production volumes are still low. These factors, the analyst argues, are compounded by the fact that, in Brazil, such items tend to be imported and are impacted by high taxes and the US dollar hike against the Brazilian real.
"With market consolidation and manufacturers investing in entry-level and premium devices, there will be a move towards massification and a reduction of the average ticket," Meireles notes.
To reinforce his point, Meireles stresses that while wearables by unknown brands accounted for 44 percent of all sales in Brazil in Q1 last year, this has dropped to 4 percent in the same period of 2019.
"Consumers are looking to buy products with greater quality, warranty and support," the analyst argues, adding that global brands looking to expand their footprint in Brazil will contribute to a decrease in final prices to consumers.
For the whole of 2019, IDC predicts that sales of wearables will increase by 91 percent in relation to 2018, with 461.7 million items sold, of which 208.500 will be basic offerings, with more advanced gadgets reaching 253.200 items sold.
Around $20bn a year will be spent on wearable devices, health trackers and remote patient-monitoring devices within five years, according to tech research company Juniper Research.