AC sellers in hot water

This was supposed to be a busy summer for the air conditioner manufacturers, what Bangladesh's tremendous growth momentum that is raising the purchasing capacity of the middle-class and getting better access to electricity and the mercury inching up every year.

Nearly 70 per cent of the ACs are sold during the April-June period as people start getting punched in the face with 30-degree weather. And this time last year, most of the manufacturers and sellers failed to keep pace with the demand.

Total sales stood at around 4.5 lakh units last year, a jump from three lakh units in the previous year. Based on last year's experiences, market players had predicted that sales would cross six lakh units this year and set the sales target likewise.

But then came coronavirus, with its all-encompassing ferocity, leaving the AC sellers down in the dumps.

Thanks to the countrywide shutdown since March 26 to flatten the curve on coronavirus, the AC sellers had to keep the shutters of their stores down.

Some are selling the units online to salvage some of their peak selling season.

"But the number is very depressing," said Tanvir Rahman, chief executive officer of Walton, one of the top players in the industry.

Walton along with Transtec has managed to bring down the prices of ACs in Bangladesh, tempting the sizeable middle-class population to purchase the apparatus that blows out artificially chilled air.

The middle-class, who are the main target consumers, are in an uncertain state as the shutdown is taking a heavy toll on the economy and subsequently posing a threat to their incomes.

"Even if the pandemic subsides in the next one and a half months, the peak season for AC sales will be over. Besides, consumers don't purchase home appliance during in moments of crisis like this," Rahman said.

Walton has set a target to sell at least four lakh ACs this year as they sold more than 2.5 lakh units last year.

"But we barely stand a chance of hitting the target," he added.

Saikat Azad, deputy general manager (marketing) at Transcom Digital, which owns Transtec brand and sells appliances of leading brands like Samsung, Panasonic, Philips, Hitachi, Sebec and Media, maintains an equally grim outlook.

Transcom Digital's e-store is open and the company is delivering products directly from their warehouses.

He fears negative growth in sales this year due to the long-term impact of the coronavirus.

Besides, reports of coronavirus transmission through the AC airflow at a restaurant in Guangzhou, China have also struck fear in people's hearts.

Mahmudul Hasan, head of corporate brands at LG, said they have kept themselves afloat through online channels but demand is very low though they offer flexible payment options like equal monthly instalment.

"Sales may increase slightly in June if the pandemic ebbs," he added.

But Md Manzurul Karim, general manager of Esquire Electronics, the authorised sole distributor of Japanese electronics brands General and Sharp, is not that hopeful.

"Consumers will not splurge on luxury items like AC amid the uncertainty induced by the pandemic," he said, adding that Esquire Electronics has cancelled all import orders from Japan.

Karim forecasts that the manufacturers will not be able to reach even 50 per cent of their targets this year.