Retail sales of headphones in Nigeria are projected to rise for a second straight year despite inflation and the devaluation of the naira.
The growth is largely driven by the popularity of mass True Wireless Stereo (TWS) earbuds, which is expected to register double-digit volume growth, according to a new report by a global market research provider.
The report by Euro Monitor International added that most consumers are shifting to the trending and more fashionable TWS earbuds.
“Premium headbands are also expected to register some volume growth. This product benefits from a niche customer base of music enthusiasts and gamers who are not willing to compromise on the sound quality and are thus willing to invest more when purchasing headbands,” it said.
The report by Euromonitor International shows that the volume of headphones in the formal market could rise for the second straight year to 1.15 million in 2023 from 1.10 million in 2022. Its value is also expected to increase by 21.5 percent to N31.8 billion.
“Despite a difficult economic situation, with continuing elevated inflation and significant devaluation of the naira, headphones are expected to register volume growth,” it said.
“In addition, the increasing proliferation of more affordable generic Chinese brands is contributing to the healthy growth.”
A breakdown of the report revealed that Oraimo is the leading player in headphones this year, having rapidly gained share since 2018 to be the only player with a double-digit retail volume share.
“The player leads in all headphone products, benefitting from its favourable price-quality ratio. Within TWS earbuds, Samsung and Apple are in second and third positions, respectively with little to separate these premium brands,” it said.
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However, Xiaomi has also been gaining notable share for each year of the review period and is set to place increasing pressure on Samsung and Apple with its much more affordable offerings, according to the authors of the report.
“In fact, Xiaomi offers a wide variety of products across a broad range of price points and has established a strong reputation of quality among local consumers,” they said.
Before the Central Bank of Nigeria collapsed all segments of the FX market into the Investors & Exporters window in June, the country’s dollar liquidity crisis had worsened on the back of the Russia-Ukraine crisis, which started in February last year.
The naira depreciated from 416.52/$1 as of February 28, 2022, to 756.91/$ as of Friday at the official market. At the parallel market, popularly called the black market, the dollar was quoted at N955/$1, compared to N575/$1 on February 28, 2022.
Apart from the FX reform, the removal of the petrol subsidy in May which tripled petrol price to N617 from N184 has increased the cost of living for Nigerians.
The country’s inflation rate rose to a 18-year high of 25.80 percent in August from 24.08 percent in the previous month, according to the National Bureau of Statistics.
The World Bank said in June that inflation pushed an estimated four million more Nigerians into poverty in the first five months of this year.
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A recent report by NielsenIQ, a global consumer intelligence company, noted that Nigerian consumers are prioritising future planning, physical wellness, saving for unforeseen circumstances and mental healthiness above every other need in the next 12 months.
“Rising price pressures impacted demand, with growth of both new orders and business activity softening as the second half of the year got underway,” it said.
Euromonitor projects that TWS earbuds and premium wireless headbands will continue to drive the growth of headphones over the forecast period.
“These products have performed well even when the economy has been faltering and with the economy predicted to improve over the forecast period due to the new government’s actions on stabilising the economy, this bodes well for both TWS earbuds and premium wireless headbands,” it said.
It added that technological advancement and further innovation in sound cancellation over the forecast period will stimulate further increases in demand for TWS earbuds.
“There will also likely be increased competition, which should keep a rein on retail prices.”
