AR & VR - Colombia

Colombia

In Colombia, revenue in the AR & VR market market is projected to reach US$125.9m in 2024.
Revenue is expected to demonstrate an annual growth rate (CAGR 2024-2029) of 9.63%, which would result in a projected market volume of US$199.4m by 2029.
The largest market within this market in Colombia is AR Software, with a market volume of US$36.3m in 2024.
While most revenue is generated the United States, the AR & VR market market in Colombia is nonetheless significant.
By 2029, the number of users in the AR & VR market market in Colombia is expected to amount to 22.6m users.
User penetration in Colombia will be 42.1% in 2024 and is anticipated to decrease slightly to 42.1% by 2029.
The average revenue per user (ARPU) in Colombia is expected to amount to US$5.7.
Colombia's burgeoning AR and VR market is increasingly attracting investment as local startups leverage technology to enhance education and tourism experiences.

Definition:

Augmented reality (AR) and virtual reality (VR) make it possible to combine the real and virtual worlds. AR is generally accessed via mobile phones and primarily relies on lenses. AR effects can be created by using lenses in social media apps, for example. AR is also used for displaying digital 3D objects in our surroundings, e.g., in gaming or eCommerce apps. Meanwhile, VR technology allows users to dive into the virtual world, and, unlike AR technology, it requires a headset device which enables the creation of virtual worlds.

Structure:

The AR & VR market consists of six different markets: AR Advertising, AR Hardware, AR Software, VR Advertising, VR Hardware, and VR Software. AR Advertising covers mobile advertising that is displayed in the most prominent social media apps. AR Hardware comprises AR headsets and glasses. AR Software is divided into three different application types, namely social media, gaming, and eCommerce applications, which can be accessed via the most prominent app stores. VR Advertising covers in-game advertising as well as advertising in VR videos. VR Hardware comprises both tethered head-mounted displays (HMDs) and stand-alone HMD headsets. Lastly, VR Software covers VR games and VR videos, which require headsets.

Additional information:

The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through in-app purchases, advertising spending, and consumer spending on apps, games, and hardware such as headsets or glasses. Sales channel data shows both online and offline revenues, which include VAT. The market only displays B2C revenues and users for the above-mentioned markets and markets; B2B and B2G revenues are not included. Additional definitions for each market can be found on the respective market pages.
Market numbers for VR headsets are also featured in the Consumer Market Insights, namely in the Gaming Equipment market of the Consumer Electronics market. Unlike the VR Hardware market in the Advertising & Media Outlook, the Gaming Equipment market also covers smartphone VR devices.
Key players in the market include companies such as Meta (Oculus VR), Microsoft (HoloLens), Snap Inc. with different lenses, and Nvidia, which offers computing hardware components.
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Analyst Opinion

The AR & VR market in Colombia has been experiencing significant growth in recent years, driven by customer preferences for immersive and interactive experiences, as well as advancements in technology.

Customer preferences: Colombian consumers have shown a growing interest in AR & VR technology, with a particular focus on entertainment and gaming applications. The ability to experience virtual worlds and interact with digital content in a more immersive way has captured the attention of many individuals, especially the younger generation. Additionally, businesses in various industries, such as real estate and tourism, have also started adopting AR & VR solutions to enhance their customer experiences and improve their marketing strategies.

Trends in the market: One of the key trends in the AR & VR market in Colombia is the increasing availability and affordability of VR headsets. As the technology becomes more accessible, more consumers are able to experience virtual reality at home or in dedicated VR arcades. This has led to a rise in demand for VR content, including games, videos, and educational applications. Another trend is the integration of AR technology into mobile devices. With the widespread use of smartphones and tablets, AR has become more accessible to a larger audience. This has opened up opportunities for businesses to develop AR applications that can be easily accessed and used by consumers on their mobile devices. From virtual try-on for fashion and beauty products to interactive maps for navigation, AR has the potential to transform various industries in Colombia.

Local special circumstances: Colombia's growing tech startup ecosystem has played a significant role in the development of the AR & VR market. The country has seen an increase in the number of local companies focusing on AR & VR technology, which has fostered innovation and competition. This has resulted in the creation of unique and tailored solutions for the Colombian market, addressing specific needs and preferences of local consumers. Additionally, the Colombian government has been supportive of the AR & VR industry, providing incentives and funding for research and development in this field. This has encouraged local businesses to invest in AR & VR technologies and has helped create a favorable environment for the growth of the market.

Underlying macroeconomic factors: Colombia's growing middle class and increasing disposable income have contributed to the expansion of the AR & VR market. As more individuals have the financial means to invest in technology, the demand for AR & VR products and services has risen. Additionally, the country's improving internet infrastructure and smartphone penetration rates have also played a role in driving the adoption of AR & VR technology. In conclusion, the AR & VR market in Colombia is experiencing significant growth due to customer preferences for immersive experiences, advancements in technology, a supportive government, and favorable macroeconomic factors. With the increasing availability and affordability of VR headsets, the integration of AR technology into mobile devices, and the presence of a thriving tech startup ecosystem, the market is expected to continue expanding in the coming years.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the AR & VR market. AR and VR enable consumers to experience a new dimension, using either a headset or installed units, as they combine the real and virtual worlds. Consumer revenue figures refer to revenues relating to AR hardware, AR software, VR hardware, VR software, and spending on AR and VR advertising. Both digital and non-digital revenues are included.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on specific predefined factors for each market market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports. In addition, we use relevant key market indicators and data from country-specific associations, such as consumer spending, internet penetration, 4G coverage, and historical developments. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).