Appliance sales off after 5-year rise

Appliance sales off after 5-year rise

Sales of electrical appliances this year are expected to drop by 8% to 65 billion baht, the first decline in five years, say major producers.

Shoppers look for sales bargains among electrical appliances at a department store. Demand for PCs, notebooks, tablets and appliances such as refrigerators and washing machines has dropped significantly this year.

Jakkrit Keeratichokchaikun, senior vice-president and chief merchandising officer of Power Mall, a unit of The Mall Group, said lower sales were due to weaker consumer spending, especially among rural people, and the political crisis in the first half of the year.

Rural dwellers have seen a drop in earnings due to the falling prices of agricultural products such as rice and rubber.

Demand for PCs, notebooks, tablets and home appliances such as refrigerators and washing machines has dropped significantly this year. 

Meanwhile, demand for smartphones is expected to grow 10% this year, compared to average growth of 30% over the past several years.

However, major electrical companies including LG, Sony, Panasonic, Samsung, Philips and Hitachi are optimistic about next year's outlook.

Alongkorn Chujit, deputy managing director of LG Electronics (Thailand) Co, said the purchasing power of consumers would be back to normal in the second quarter of next year after the government solves the problem of falling farm product prices.

Potential products that will see a growing market next year include TV sets and small appliances for the kitchen.

"The expansion of digital broadcasting will create more demand for TV sets," he said.

Mr Jakkrit added that Power Mall would focus on providing more value added products.

He said that electrical appliance companies should seriously put more effort into product development, with designs to fit consumer lifestyles, rather than focusing only smartphones and big sales promotions.

It is expected that electrical appliance players including LG, Panasonic and Sony will focus on middle- and high-income earners because they were less affected by the economic downturn.

Panasonic will add imported products including new refrigerator models priced around 60,000 baht and LG will introduce a 3-million-baht TV set.

"The business next year is expected to return to the same level of 2013, with sales of 70 billion baht," Mr Jakkrit said.

Mr Jakkrit expects sales at Power Mall next year will grow by 5% to 10.5 billion baht. This year's figures are expected to be stable at 10 billion baht, the same level as last year.

To achieve its goal, the company has joined hands with electrical appliance firms to launch "Power Mall Electronica" from now till Jan 5 at Paragon and The Mall's Bang Khae, Bang Kapi and Ngam Wong Wan branches.

Discounts of up to 40% are being offered along with gifts and giveaway products and overseas package tours. The campaign is expected to generate 800 million baht in sales.

Mr Alongkorn expects sales of LG products this year will increase by 7% to 20 billion baht, compared to an earlier projection of 15%.

TV sets will drive sales growth this year. The company expects to see sales expand 15% to 23 billion baht next year.

Do you like the content of this article?
COMMENT