Consumer electronics companies predict grim outlook for 2020
The home electronics sector is suffering from a landslide in demand with the sales more likely to stay below 70 % of total annual target as individuals are reluctant to invest on luxury items amid the ongoing pandemic, according to various market players.
As per a study conducted by the High Commission of India on the 'Electronics sector of Bangladesh' in 2017, when the sector's market value stood at $2.7 billion, sales were likely to reach $2.73 billion in 2019, $2.73 billion in 2020 and $6.35 billion in 2025.
To provide a boost to the business enterprise, the electronics companies are actually looking forward to the web retail platforms to send the consumers' desired products with their doorsteps.
This can help manufactures make at least enough revenue to survive the Covid-19 fallout, industry insiders said.
Like the Indian high commission's study, local producers and retailers believed that the market size for gadgets could have reached around $3 billion in 2019.
Currently, home appliances such as for example televisions and refrigerators are the most sought-after items amid the country's burgeoning middle income, the primary demographic for such products.
The sector is continuing to grow by about 15 % on average within the last a decade, they added.
Major players in the domestic consumer electronic market are: Walton Group, Transcom Electronics, Rangs Electronics, Rangs Toshiba, Best Electronics, MyOne Electronics Industries, Jamuna Electronics, PRAN RFL (Vision), Esquire Electronics, Electra International, and Super Star Group (SSG).
Meanwhile, foreign companies like Samsung, LG, General, Sharp, and Whirlpool are also popular among local consumers.
However, in line with the study it isn't possible to recognize the manufacturers' market share of the consumer electronics sector as no such data is easily available online some companies refused to talk about their sales data through the primary data collection phase.
Electronics companies in Bangladesh produce a number of items, such as for example lightbulbs and fans, that are considered to be of top quality with competitive prices.
Large-scale commercial conglomerates like Walton and Transcom are prime examples as both have created very successful empires in the neighborhood consumer electronics market.
However, despite all of the promotional offers such as for example cash backs and discounts available, consumer electronics cannot even achieve its minimum sales target in this year's Eid-ul-Fitr and Eid-ul-Azha.
Saikat Azad, deputy general manager of marketing at Transcom Digital, which retails the products of leading international brands like Samsung, Panasonic and Philips, said his company is maintaining an equally grim outlook.
Azad fears that there could possibly be a poor growth in sales this year due to the lasting ramifications of the coronavirus. He also assumes that Transcom's sales target will be stuck at 60 to 70 % this year.
And although the sale of washing machines and kitchen electronics has increased significantly, the share of earnings these products take into account is negligible.
Despite having reopened all their outlets in the united states, sales are still quite low when compared to previous year, he added.
Md Manzurul Karim, general manager of Esquire Electronics, the sole local distributor of Japanese electronic brands General and Sharp, said sales of gadgets began to pick back up in June however, not significantly.
According to the general manager, individuals are not purchasing such products unless it really is absolutely necessary as a result of the current situation.
So, it is a tough task for the market to come back to normalcy by the end of the year.
Using his company's market analysis for example, Karim said sales in the sector will decline by 50 per cent in comparison to this past year.
Manufacturers and retailers traditionally make 50 % of their projected earnings for the year during the two Eid festivals but this year was different because of the pandemic.
Now, the sector's primary goal is simply to survive and change to the 'new normal', making the existing scenario a stark contrast to that of the prior year, when consumers were less concerned over the Covid-19 impact, he added.
Golam Morshed, additional managing director at Walton High-tech Industries, said over the past six months, the company has sold just 10 lakh refrigerators as the number was 15 lakhs units in the corresponding period the entire year before.
During the same period, Walton sold around 2 lakh tv set sets although it was 3 lakh units in 2019.
Besides, the business sold 42,000 ac units in the last half a year although it sold 54,000 units this past year.
However, although domestic sales have dropped, export orders are about 10 time higher than what it had been in the pre-pandemic era, Morshed said.
The additional managing director hopes that the problem will soon go back to normal and sales in the post-pandemic era will be sufficient.
