AC top-selling home appliance this Eid
Air conditioner is the top-selling home appliance in Bangladesh this Eid-ul-Fitr as consumers look to beat rising temperatures.
April, May and June are the peak season for the outlets retailing ACs as the temperature rises from March. About 90 per cent of the ACs are sold during the quarter.
"AC has been the most-selling item among all home appliances ahead of Eid," said Md Manzurul Karim, general manager of Esquire Electronics, the sole distributor of Japanese electronics brands General and Sharp.
Sales have increased by 15-20 per cent so far in 2022, compared to the same period in 2019, he said.
An official of Singer Bangladesh echoed Karim. The company's AC sales have gone up by 10-15 per cent, he said. "Sales are getting better as days pass."
In Bangladesh, ACs used to be a luxury even a decade ago and only the affluent and upper-class could afford them. However, with growing income in the past one decade, affordability has increased.
"You would see a lot more families purchasing ACs. And most of their choice remains Samsung," said Shahriar Bin Lutfor, director and head of business of consumer electronics of Samsung Bangladesh.
According to Saikat Azad, marketing manager of Transcom Digital, ACs in the price range of Tk 110,000 to Tk 115,000 are selling more.
Factory gate deliveries of ACs have increased by 98 per cent compared to 2019, said Tanvir Rahman, chief business officer of Walton Air Conditioner.
"Compared to 2019, our retail growth has increased by 157 per cent till April," he said, adding that ACs in the range of Tk 46,500 to Tk 67,500 are high in demand.
As Eid draws nearer, Fair Group is also receiving a higher response.
"This year, we have set a target to sell 30,000-40,000 units of ACs. Our sales growth is quite good," said Mohammed Mesbah Uddin, chief marketing officer of the company.
The exact sales data on the AC market is hard to come by.
Retailers say the sales of ACs will reach 5-6 lakh units in 2022 and the market size will expand to Tk 4,000 crore.
The market has expanded by 23 per cent compared to a year ago, Lutfor said.
AC sales start picking up in February and peak around April and May. This year is no different.
"Additionally, Eid-ul-Fitr has pushed up sales. We hope to continue this trend till October," Lutfor said.
Samsung has slashed AC prices by 15 per cent to 17 per cent from a year ago, which helped it post 212 per cent sales growth from last year to date.
"We see scorching heat this summer. Customers are all invited to our stores if they would like to cool down this summer," he said.
Due to the increase in the price of raw materials owing to higher shipping costs and supply chain disruptions, the price of ACs has gone up in Bangladesh by as much as 5 per cent
"Due to the price advantage, there is a distinct enthusiasm for Walton ACs among the middle class. Apart from this, the upper class is also showing interest in buying Walton ACs thanks to some unique features," said Tanvir Rahman.
Overall, home appliance makers and retailers are registering better sales this year compared to the pre-pandemic level thanks to receding coronavirus caseloads. Sales had hit rock bottom in the last two years because of the pandemic-induced income losses and economic slowdown.
Usually, home appliance makers and retailers post higher sales in the days leading to Eid-ul-Fitr, the biggest spending season.
Rapid urbanisation, an increase in per capita income, and the expanding middle class have propelled the growth of the home appliance market in Bangladesh.
The major players in the home appliance market are Walton Group, Transcom Electronics, Rangs Electronics, Rangs Toshiba, Singer Bangladesh, Best Electronics, Pran RFL (Vision), Esquire Electronics, and Electra International.
Foreign companies such as Samsung, LG, General, Sharp, and Whirlpool are also popular.
The market size for home appliances is about Tk 10,000 crore and the segment is growing at a pace of 20-25 per cent annually.
Besides ACs, refrigerators and ovens have also been among the top-selling items. The need to heat up foods during suhoor of the fasting month of Ramadan has driven up the sales of ovens.
"The sales of ovens have doubled compared to two years ago," Karim added.
Sales of refrigerators have increased by 5-6 per cent compared to the 2019 level. The demand for the items priced from Tk 70,000 to Tk 80,000 is on the rise, he said.
Singer Bangladesh's refrigerator sales are up 10-15 per cent, said the official of the company.
Walton's refrigerator is the top-selling product this Eid. The company is also posting remarkable sales of ACs, TVs and other home appliances, said Mohammad Firoj Alam, its chief marketing officer.
"The sales of Walton products have surpassed the pre-pandemic levels."
Fair Group's Mesbah says refrigerators are also selling well. Compared to 2019, the sales have increased by 5-7 per cent.
In order to drive up sales on the occasion of Eid, retailers have come up with equated monthly installment facilities, exchange offers, discounts, and cash-back facilities.
Retailers say the prices of home appliances at the retail level have gone up since the manufacturing cost has increased for the rise in the prices of raw materials and higher shipping charges caused by pent-up demand and supply chain disruptions.
For example, consumers have to 10 per cent more to buy home appliances such as ACs.
The shipping cost has surged by four to five times, while the US dollar conversion rate has gone up, Azad added.
"We are working on how to expand local production so that we can offer home appliances at reduced prices."