The El Niño weather phenomenon is expected to increase sales in the electrical and electronics industry by 4-5% this year, up from 230 billion baht in 2022.
Leading distributors of major electrical appliances and leading retail chains in the sector concur that the market for electrical appliances grew during the first nine months of this year. Their collective outlook suggests growth will persist at a comparable rate to the level recorded last year, despite the fact that the purchasing power of lower-income individuals has not yet fully recovered.
This situation is primarily attributed to several challenges such as a high level of household debt, inflation, and the absence of government-issued stimulus packages aimed at boosting consumer spending.
Jakkrit Keeratichokchaikun, chief executive of trading at The Mall Group Co, said factors that supported sales of electrical appliances so far this year included a surge in the number of tourist arrivals, simultaneous launches of innovative products by various brands, and stronger demand for larger appliances such as televisions and refrigerators. Additionally, there has been a noticeable shift towards the premium market segment. With the impending increase in the minimum wage, products experiencing a surge in demand include dishwashers and washing machines, he said.
Mr Jakkrit expects the entire electrical appliance market in Thailand, which encompasses IT and mobile phones, to expand by 5% to reach 245 billion baht this year, largely driven by the El Niño phenomenon.
Mr Jakkrit is also optimistic regarding the prospects for the electrical appliances industry next year, provided the government implements more campaigns aimed at boosting the spending power of low income earners.
Amnaj Singhachan, senior marketing manager of LG Electronics (Thailand) Co, said thanks to the El Niño phenomenon, demand for LG air conditioners jumped by almost 100% during the first nine months of the year. In September alone, LG’s sales witnessed an impressive 60% year-on-year surge.
Remarkably, this surge took place even though September and October are historically considered to be part of the low season in terms of demand for air conditioners, he said.
According to Mr Amnaj, the rising cost of electricity bills compelled consumers to opt for inverter air-conditioners, and the prolonged period of hot weather associated with the El Niño phenomenon further fuelled demand for air-conditioning products.
“We believe the El Niño phenomenon will persist into next year, resulting in a continuation of the uptick in air conditioner sales,” Mr Amnaj said, adding that LG is preparing to offer a variety of air-conditioner models at different price points to cater to consumer preferences.
Regarding the increase in the daily minimum wage, Mr Amnaj said the company needs to sell more products to achieve economies of scale and optimise its product shipments from abroad and domestic suppliers for greater efficiency.
Mr Amnaj anticipates LG’s sales this year to grow by 20% to 15 billion baht, a substantial increase from the initial projection of 12% made earlier this year.
In light of the promising outlook for the electrical appliance industry, Ratchata Suttapattanon, chief business officer of the speciality business group at The Mall Group Co, said it has set aside a substantial investment of 400 million baht to revamp two Power Mall stores located in Bang Kapi and Bang Kae. These branches will be transformed by expanding the floor space at the two stores from 4,000 square metres to 5,000 sq m. The added space would be able to accommodate a bigger range of brands and larger electrical appliances, which were previously only available at downtown branches of Power Mall.
In an effort to encourage shoppers to spend, Mr Ratchata said The Mall Group has teamed up with over 200 brands to launch the Power Mall Electronica Showcase at all branches of Power Mall, which continues through Oct 31.
Meanwhile, Suwin Koseeumnuay, head of the consumer electronics team at Samsung, said he is feeling positive about Thailand’s market for electrical appliances next year.
With the El Niño phenomenon expected to persist into next year, Mr Suwin expects demand for air-conditioning products to continue due to the prolonged period of hot weather. In light of this, Samsung has introduced air-conditioners equipped with smart features aimed at helping consumers reduce their living costs.
According to Mr Suwin, Samsung also expects the government’s digital wallet initiative to help increase sales of electrical appliances overall, athough it would depend on the details of the campaign.