Browse the complete Report on: Colombia Information Technology Report Q3 2010
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Colombian IT spending is projected to grow at a compound annual growth rate (CAGR) of 11% over the 2010-2014 period as the market continues to mature. In H110, vendors reported that demand was up in both consumer and large company segments. The consumer-driven economic boom of recent years may have come to an end, but government programmes and growing computer affordability will support more spending on IT products and services.
IT spending is projected to grow 16% in 2010, with growth areas in both consumer and business segments. The economic outlook in 2010 remains mixed for the IT market, however, as key IT spending verticals like manufacturing are unlikely to return to 2007 growth levels for some time. Similarly, despite strong PC sales in January 2010, there is little short-term prospect of consumer growth returning to the 5%+ levels seen in the past few years.
The government sees increased information and communication technology (ICT) spending as a key means to advance its central strategic goal of helping the country reintegrate disaffected groups. Per capita IT spend is projected to rise by 43% from US$44 in 2010 to US$63 by 2014, while PC penetration has exceeded expectations and could reach 20% within our forecast period.
Industry Developments
The Ministry of Communications assigned a COP1.5bn budget for the national plan for ICT (PNTIC) for the 2008-2010 period, with the money channelled through the Communications Fund. The 2008-2010 PNTIC sets out a number of targets for 2010, including boosting the percentage of municipalities with broadband access to 70% and increasing the number of households with broadband access to 40%. In early 2009, local Colombian software developers association Fedesoft said that it expected further action from the national government during that year to support the domestic software industry. The government had been working on a general software law that was on track to be approved by the end of 2009 or early 2010. The law is expected to include measures such as allowing investments in software to be amortised and depreciated like other capital investments.
The government is pressing ahead with its computers for education (Computadores para Educar) programme, which has delivered 161,300 computers to schools since 2001, according to government data. The programme has piloted Microsoft Windows XP versions of the One Laptop Per Child (OLPC) XO laptop.
Competitive Landscape
The Colombian unit of Lenovo reported 33% growth in 2009. In October of that year, Lenovo stepped up its campaign to penetrate Colombia’s retail PC segment. Lenovo plans to expand its retail sector presence through expanding channel partnerships and its new desktop and laptop series will be distributed through the companies MPS, Quorum, SED, Cubix and Makrocomputo.
One significant local market growth area is SAP-related consulting. In April 2010, Chilean IT consultancy ActualiSAP announced that it was expanding into the Colombian market and would open a Colombian office this year. Meanwhile, HP has partnered with SAP on its online solution ‘Business Allin- One Fast-Start’, while Neoris has expanded its operations by establishing a new unit in Colombia that offers IT consulting, systems integration, business operations and outsourcing services. In H110, US vendor Citrix Systems was one vendor to report growing interest in virtualisation from Colombia’s public sector and launched a new subsidiary in the country to take advantage of the potential opportunity. Meanwhile, the official launch of Indian IT firm Tata Consultancy Services (TCS)’s new Colombia office highlighted the growing opportunities in the local financial services sector, which accounts for around 50% of TCS’s regional revenues.
Computer Sales
PC sales are projected at US$973mn in 2010, following strong growth in the first half of the year, and should pass the US$1.4bn mark by 2014. Retail PC sales surged in January 2010, according to official data, supporting projections of a market bounce-back in 2010 in line with private consumption. Businesses are expected to maintain a cautious attitude to IT investments in 2010, however. Colombian PC penetration reached 12.8% as of mid-2009, surpassing the government’s previous 2010 target of 10.8%. The main long-term drivers of growth in the Colombian PC segment are lower prices and greater affordability. Notebook sales drove significant growth in 2009 and accounted for over 50% of PC shipments for the first time.
Software
Colombia’s software market is projected to be worth US$378mn in 2010 and software CAGR for 2010- 2014 is forecast at around 11%. Software has opportunities for growth over the next few years although, in the near term, strong economic headwinds will lead some companies to defer system updates. Software piracy was estimated to account for 56% of software in 2008, down considerably from the rate a few years ago.
Vendors reported strong business software demand growth in H110, particularly among larger and medium companies. Most demand in the near term will be for basic solutions, such as enterprise risk management (ERM) and supply chain management systems.
IT Services
Colombia’s IT services spending is projected at around US$781mn in 2010, with 16% growth compared with 2009. The percentage of IT market revenues generated by services is currently around 39%, high by emerging market standards and above the regional average. The majority of demand, around 75%, still comes from the large company sector.
In Colombia, several sectors have particular potential, including financial services and utilities, with Isagen and Empresa de Energia de Cundinamarca awarding some large tenders. In the last year or two, there has been a trend towards bigger managed service and outsourcing deals.
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Browse the complete Report on : Colombia Retail Report Q4 2010

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The Q410 BMI Colombia Retail Report forecasts that the country’s retail sales will grow from an estimated COP178,818bn (US$90.92bn) in 2010 to COP223,937bn (US$113.86bn) by 2014. Underlying economic growth, a young and increasingly urban population, the rise in disposable income and greater numbers of working women are key factors behind the forecast growth in Colombia’s retail sales. Colombia’s nominal GDP is predicted to be US$254.0bn in 2010, with 2009’s marginal growth of 0.4% expected to improve to 3.9% in 2010 as the economy begins to recover. Average annual GDP growth of 3.6% is predicted by BMI between 2010 and 2014. With the population increasing from an expected 46.3mn in 2010 to an estimated 48.7mn by 2014, GDP per capita is forecast to rise by 31.2% by the end of the forecast period, reaching US$7,197. Our forecast for consumer spending per capita is for an increase from a predicted US$3,582 in 2010 to US$5,496 by 2014.
Domestic demand will continue to be the key driver for the growth in GDP, with improvements in the security outlook feeding through to increased consumer and investor confidence. Although Colombia did not reach its target of 4mn tourist arrivals in 2009, due to factors such as the H1N1 virus and the global economic crisis, it still achieved 16% per cent growth in the number of foreign visitors last year, while the world average contracted by 4%.
In 2005, 64.5% of the Colombian population was described by the UN as economically active, with 39.2% in the 20-44 age range, which is crucial to retail sales. Over three-quarters of the population were classified by the UN as urban (77.4%). In 2010, the urban population is forecast to reach almost 80%, with 38.5% in the 20-44 age band and 67.3% of the population expected to be active. The retail sector benefits from Colombia’s status as the third most populous country in Latin America. Retail sub-sectors that are likely to see strong growth over the period include over the counter (OTC) pharmaceuticals, which BMI forecasts to grow from US$0.48bn in 2010 to US$0.80bn by 2014, a rise of 67.9%. Sales of consumer electronic products are estimated at US$3.46bn in 2010, with BMI forecasting a 43.9% rise to US$4.98bn by 2014.
Retail sales for our Latin American universe in 2010 are expected to reach US$1,166bn, based on varying national definitions. Total consumer spending for the region, based on BMI’s macroeconomic database, is predicted to be US$2,590bn. Mexico and Brazil are expected to account for an estimated 74.3% of regional retail sales in 2010, with those two countries plus Venezuela forecast to account for 84.6% of all retail sales in the region by 2014. For Colombia, its predicted 2010 market share of 7.8% is expected to fall to 6.3% by 2014.


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Browse the complete Report on : Colombia Food and Drink Report Q4 2010

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BMI View: the consumer picture in Colombia looks relatively positive over our five year forecast period. A reduction in credit, higher unemployment and high personal debt levels mean that the pace of growth is likely to be lower than that witnessed in the boom years leading up to the global financial crisis. However, with strong fundamentals and re-emerging indications of growth, Colombian consumers look set to continue steadily increasing the amount they spend, with positive implications for the food and drink industry. This will continue to encourage investment in the region, with important players such as Carrefour and Grupo Nacional de Chocolates both announcing new development plans in recent months.


Headline Industry Data

2011 per capita food consumption = +4%; forecast to 2014 = +18%
2011 alcoholic drink sales = +2%; forecast to 2014 = +8%
2011 soft drink sales = +3% ; forecast to 2014 = +12%
2011 mass grocery retail sales = +5%; forecast to 2014 = +23%


Key Macroeconomic Data

2010 Real GDP growth = +3.9%, 2011 Real GDP growth = +3.2% (2009, +0.4%)
2010 Consumer Price = +3.5% chg y-o-y (period average) (2009, +2%)
2010 Unemployment Rate = 10% (period average) (2009, 11.9%)


Key Company Trends

Opportunities for Coffee – The market for Colombian coffee is dominated by instant (soluble) coffee and
the sector has delivered only moderate growth in recent years. Traditionally the best Colombia coffee beans had been reserved for export markets where more discerning consumers were prepared to pay a premium for higher-grade coffee. This is gradually changing, with both Grupo Nacional de Chocolates and local industry association National Federation of Colombian Coffee Growers (Fedecafe) running campaigns to encourage Colombian consumers to consume higher quality coffee. In line with this, Nacional de Chocolates is investing US$75mn in its domestic coffee processing plants, launching a new premium coffee brand and has recently taken majority control of local coffee producer Industrias Aliadas.
New Beer Taxes – Value-added tax (VAT) on beer has recently increased from 3% to 14%, a move that raised average beer prices by at least 8%. In response to the tax increase, SABMiller warned that the rise could lead to a one-off fall in its volumes of up to 4.5%. The firm also cut its medium-term volume growth target for Latin America as a whole from 5-7%, to 4-6% a year. The company’s weak first quarter results, for the three months to June 30 2010, saw a volume decline of 6% in Colombia, suggesting that the impact of the tax rise could be even more severe than first envisaged.


Key Risks to Outlook

Faster Credit Expansion – With consumer spending in Colombia tied closely to credit expansion, a key risk to our outlook is any change in this indicator, in turn a factor that is dependent on consumer propensity to borrow, bank's willingness to lend and on interest rates. Slower credit going forward is likely to cap private consumption growth, and this reinforces our view that Colombia's inflationary outlook is set to remain benign, as price pressures are held back over the medium term. Faster Growth In GDP – A second risk to our forecast is that Colombia will experience more rapid economic growth than we are currently predicting. Either a swift increase in foreign direct investment (FDI) or global oil prices could have a positive impact on the broader economy, with positive implications for our consumption forecasts. This represents an upside risk.


About Us

ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.


Contact:

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