Philippines market

1. Introduction to Philippines

The Filipino consumer electronics market has been in decline since 2012. The market is forecast to recover and grow moderately toward 2019. Table 1 shows the market value of consumer electronics product in Philippines, the Philippine consumer electronics market had total revenues of $0.8bn in 2014, representing a compound annual ratio of change (CAGR) of -2.3% between 2010 and 2014. In comparison, the Indonesian and Chinese markets grew with CAGRs of 2.0% and 1.7% respectively, over the same period, to reach respective values of $1.8bn and $40.6bn in 2014. The audio & visual equipment segment was the most lucrative for the Philippine consumer electronics market in 2014, with total revenues of $0.6bn, equivalent to 69.4% of the market's overall value. In comparison, sales of photographic equipment generation revenues of $0.3bn in 2014, equating to 30.6% of the market's aggregate revenues. Photographic equipment is becoming obsolete to the casual consumer, with smartphones and tablets providing similar functionality but with much greater utility, explaining the segment's collapse in recent years. The performance of the market is forecast to accelerate, with an anticipated CAGR of 2.4% for the five-year period 2014-2019, which is expected to drive the market to a value of $1.0bn by the end of 2019. Comparatively, the Indonesian and Chinese markets will grow with CAGRs of 1.8% and 3.3% respectively, over the same period, to reach respective values of $2.0bn and $47.8bn in 2019. The Filipino consumer electronics market shrank by 2% in 2014 to reach a value of $859.4 million. The compound annual ratio of change of the market in the period 2010–14 was -2.3%.

2. WDIRC selling

The forecast of WDIRC selling can be shown in Table 2 during the first ten years since product launched. Here the assumptions of households, occupancy ratio, initial sale, selling price, and manufacture cost are 18,539,769, 0.0040%, 742, 250 and 200, respectively. The first year is set as the baseline for comparison with the following years, the sale volume, year penetration, revenue, cost and profit are 742 (sets), 40 (ppm), 185,398(USD), 148,318 (USD) and 37,080 (USD), respectively. As we think, the growth rate with years will be 1, 2.04, 4.61, 5.40, 7.49, 9.01, 11.54, 14.07, 15.42 and 16 times over the first year. The year penetration of WDIRC will be from 40 ppm to 640 ppm at the end of tenth year, the totally ownership (penetration) is close to 0.346%, it still is a low penetration ratio in Philippines even WDIRC listed in market for ten years. However the revenue, manufacture cost and profit these three also present an ascending trend, the profit earned from Philippines is about $ 0.593 million at the tenth year in an exclusive market, it owns a huge market and profit in this market. Totally according to our prediction and assumption, the selling in Philippines will be up to 64,202 sets, even this; the penetration ratio is still lower than other consumption electric products such as TV, Refrigerator, Air conditioner, and Wash machine.

How about the annual growth rate for selling WDIRC in Philippines market; Fig. 3 shows the result. Here the calculation of revenue can use this equation as “WDIRC’s Revenue = Annual growth rate * Year + Baseline”, the formula can be written in a mathematic equation in Figure. According to this regression by data simulation, the annual growth rate it take about $332.481k per year (r² =0.9894), in other words, by averaged the annual revenue is $332.481k in Philippines market for selling WDIRC product.

3. Rice selling

A ten-years forecast to WFR sale, after WDIRC launched in Philippines market, is presented in Table 3. The first year since the marketing of WDIRC, online/offline deals for WFR sale are 30,240 kg, here the assumptions of population, rice consumption, sharing of WFR, online buying rate and market sharing are 102,250,133, 118.30, 0.01%, 5.00%, and 50%, respectively. How to calculate the WFR volume by online/offline sale, Eq. 1 is the equation for calculating the WFR sale volume.

Eq. 1 SaleVolume=Population x RiceConsumption x WFRratio x On/OffBuyingRatio x MSharingRatio

(eg. 30,240 = 102,250,133 x 118.30 x 0.0001 x 0.05 x 0.5)

The use rate of WFR is set as 0.00030 kg/person-year. Based on this, we can get the annual revenue is $ 15,120 (WFR priced as $0.5), and the profitability is set to 10%, so the profit that will earn $ 1,512. Changing with the time, the ratio of WDIRC in kitchens will increase and cause the use of WFR increasing. We assumed the series of growth rate (G.R.) by years is 1, 7.09, 12.82, 15.06, 17.85, 19.74, 22.63, 29.87, 34.41 and 39.71. G.R. it is based on the prediction of WDIRC’s growth. By this series of G.R., both revenue and profit, they will also be presented like this serial when the dealing cost of WFR through online/offline transaction is keeping constant. Whatever the cost of online/offline transactions depends on the volume of WFR’s selling, so if the volume with time is scaling up, the dealing cost will be significantly lowered, in other words, the profitability with time will increase more than our prediction. If all hypotheses are true, the profit in tenth year will approach to $ 60.048. Eq. 2 calculates the penetration of WFR which to be used in this country by people. From this indicator (URate of WFR), we can see the level of penetration of WFR, even at the tenth year, the level of WFR use rate in Philippines is still underestimation, that’s meaningful for us to optimistically think, the use rate of WFR can be easy completed and it will be grew up more than our prediction.

Eq. 2 URate of WFR = SaleVolume of WFR / Population

(eg. 0.00030 = 30,240 / 102,250,133)

Regarding the revenue of WFR selling in Philippines, Fig. 4 shows the result. This is a prediction by data simulation according to our assumption, the regression could be calculated as “WFR’s revenue = Annual growth rate * Year + Baseline”. The result shows the annual growth rate is $59.517k per year (r²=0.9767), in other words, the increasing of revenue of WFR selling in China is $59.517k dollar per year. This growth can help the company to maintain its team in the local market for servicing customers.

4. To summarize the revenue and profit

Here according to the estimations above, we summarize the incomes from sales of WDIRC and WFR in Philippines. Both revenues and profits are presented in Table 4. In the first year, the products of WDIRC and WFR are unfamiliar with Philippines people; namely the recognition and acceptance aren’t well to local consumers, so on the beginning (1^st year) sales would be not good and the totally revenues and profits will be $ 200,518 and $ 38,592, respectively. Both of them will increase with years when selling with good experiences and promotions. Through our forecast, at the end of tenth year, the profits of WDIRC and WFR will be up to $ 593,250 and $ 60,048, and the totally profit will be $ 653,298, this is a huge profit which be created in Philippines market by our novel products and services.

Totally the revenue of WDIRC and WFR (2W) selling in Philippines market can be shown in Figure 5. The 2W revenue in first year is $200.518k dollars, after that the growth rate of revenue is 391.998k per year, this is a simple regression by mathematic model to predict the revenue on product selling. In practice, there are other factors that need to be considered much more, it could be higher than this or lower. Whatever by this calculation let us to trust that the market it always be there.