Company Trend Analysis - Homeware Market In Colombia Draws Miniso - APR 2018

BMI View: A recovery in economic growth, led by a pickup in private consumption as inflation and unemployment levels fall, is leading to an uptick in consumer spending in Colombia. This pickup will benefit the household goods market with Japanese company, Miniso the latest to enter the market, further motivated by rising disposable incomes and urbanisation levels.

Japanese homeware retailer Miniso has reached a strategic agreement with Miniso Colombia SAS in MINISO Industrial Park to launch its stores in Colombia. The deal is a crucial step forward for the company as it will enable the further expansion into other Latin American markets, after having entering Brazil and Mexico already. Miniso is rapidly expanding, aiming to open 80-100 stores monthly and has opened over 2,600 stores globally.

Miniso's entry into Colombia will take advantage of our forecast for stronger economic growth in 2018 of 2.6%, up from 1.6% in 2017, supported by private consumption growth and investment (see ' Economy Past The Worst, Modest Growth Ahead', January 5, 2018). Slowing inflation and falling unemployment will boost the labour market which will boost real household spending to an estimated 3.0% in 2018, up from 1.3% in 2017. We also expect consumer confidence and retail sales to pick up in 2018, after being hit in the first quarter of 2017 by the introduction of the new tax reform measures and higher value-added tax (VAT), which increased from 16% to 19%. We estimate that the effects of the higher rate of the VAT have worn off and consumers becoming more optimistic as consumer confidence comes in at -5.4 in January 2018, up from -30.2 in January 2017.

Consumer Confidence Picking Up
Consumer Confidence and Retail Sales, % y-o-y
Source: Bloomberg, BMI Research

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