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Coronavirus: Refrigerator, AC sales dip in peak season

  • Published at 09:38 pm April 29th, 2020
Air conditioner AC sales
The summer season typically makes up 40% of the annual sales of similar electronic products, including refrigerators and air conditioners Syed Zakir Hossain/Dhaka Tribune

'Contrarily to revenue, our operating costs have not decreased. We will still have to pay monthly salaries to our staff along with the rent for showrooms’

Sales of refrigerators and air conditioners (AC) have fallen in unprecedented manner during the peak demand season of the year due to the nationwide shutdown by the government in order to stem the spread of the deadly coronavirus infection. 

All sales centres have been closed since March 25. The situation is likely to result in deep financial losses for electronics makers, said several employees working in various companies of the industry. 

The summer season typically makes up 40% of the annual sales of similar electronic products, including refrigerators and air conditioners, according to Md Zahid Alam, secretary general of the Bangladesh Refrigerator Manufacturers and Exporters Association.

“The months April and May are the peak time we eagerly look forward to in a year to sell refrigerators and air conditioners,” said KMG Kibria, Head of Brand and Communication of Minister-Myone Group. 

“The lockdown now in place will hurt us the most as we have enough products in stock but nowhere to sell them,” said Kibria. 

The company has online selling services but there is almost no demand, he said. 

He added: "Contrarily to revenue, our operating costs have not decreased. We will still have to pay monthly salaries to our staff along with the rent for showrooms’.”

The shutdown reduced the demand for electronics products with showrooms closed, said Salman A Khan, Head of Product at Rangs Industries Limited. 

“Sales through online platforms are not yet significant. To make things worse, we are not being able to deliver the ordered products to customers amid the lockdown,” Khan told Dhaka Tribune. 

The biggest fear is a decline in the purchasing power of people, which will have a negative impact on the sector over a broader time-frame, said Khan. 

Uday Hakim, executive director of Walton Group, stating similar views, said that the shutdown would be eating away demand for refrigerators and air conditioners. “We were in a better position with our sales at the Dhaka International Trade Fair in January,” he added.  

The workshops, handling parts of such electronics, have also been shut since March 25 and are facing substantial financial losses as well. 

The market size of parts of air conditioners and refrigerators currently stood at Tk1,000 crore, said M Lutfar Rahman, president of the Bangladesh Air-conditioning Equipment Importers Association.

“There are 600 members in the association and we need government incentives to survive the on-going shutdown,” he added. 

LankaBangla Investment Ltd has shed some light on the air conditioner market in its recent market research report. Approximately 25 local and foreign companies are marketing different types of air conditioners in Bangladesh. The market size stood at Tk6,500 crore last year, with local companies contributing two-fifths of the market.