Home Appliances & Consumer

Electronics Market Review

Date of Publication: Thursday, 14th October, 2021
EQUITY RESEARCH
Home Appliances & Consumer Electronics Market Review

Table of Contents
THE INDUSTRY IN FOCUS ........................................................................................................................................................ 2
DEMAND DRIVERS................................................................................................................................................................... 3
SEGMENT: TV .......................................................................................................................................................................... 5
SEGMENT: AC .......................................................................................................................................................................... 6
SEGMENT: HOME APPLIANCES ............................................................................................................................................... 8
LOCAL PHONE ASSEMBLY AND MANUFACTURING ................................................................................................................ 8
BUDGETARY POLICY AND REGULATORY INCENTIVES ............................................................................................................. 9
COVID-19 IMPACTS ON CONSUMER ELECTRONICS INDUSTRY............................................................................................. 10
INDUSTRY OUTLOOK ............................................................................................................................................................. 11

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Home Appliances & Consumer Electronics Market Review

The consumer electronics represents one of the fastest growing segment in Bangladesh.
Steady GDP growth, increasing number of MAC population, increased urbanization,
increasing purchase power and change in the lifestyle of people indicates promising
industry prospect. Bangladesh is one of the Asia's buoyant consumer good markets and
has a growing need for home appliances and other consumer electronics products. As
the middle class population of Bangladesh is growing, home appliance products such as
televisions and refrigerators are considered as the most sought after items. Consumers
from low income households generally prefer local brands for their price affordability
although the local brands may lag behind the foreign brands regarding the warranty
period and after sale services. In the rural areas, the demand for television, refrigerator
and fan is increasing while demand for air conditioner, refrigerator and smart TV is
increasing in the urban areas.
THE INDUSTRY IN FOCUS
The market is steadily growing with increasing demand each year

The market size of consumer electronics industry as of 2019 is around $3 billion and the
industry has grown at an average rate of 15% in the last 10 years. The projected market
size of “Consumer Electronics Sector of Bangladesh” is $6.35 billion in 2025. 1
The consumer electronics industry can be divided into four broad segments- Television,
Refrigerators, Air Conditioner and Home Appliances.2
Chart 1: Growth Estimates of Consumer Electronics Market (%)

2021 3.61%

2022 4.15%

2023 4.77%

2024 5.49%

2025 6.35%

Source: Indian High Commisssion

Though industry was previously dominated by foreign players, local players

are gaining the leadership position with fresh investments and capacity
enhancement

The industry had long been dominated by the foreign companies. Local companies such
as Walton, Butterfly, Rangs etc. entered the market at first by operating assembly
plants. Later, local companies started establishing manufacturing facilities, producing
consumer electronics products locally while importing necessary technical components
from abroad. Some of the major local companies in the domestic consumer electronics
industry are: Walton Group, Transcom Electronics, Rangs Electronics, Rangs Toshiba,
Best Electronics, MyOne Electronics Industries, Jamuna Electronics, PRAN RFL (Vision),
Esquire Electronics, Electra International, and Super Star Group (SSG). The major
foreign companies in the domestic consumer electronics industry are: Samsung, LG,
General, Sharp and Whirlpool. Locally manufactured lightbulbs and fans are deemed to

1
https://www.thedailystar.net/business/news/consumer-electronics-companies-predict-grim-outlook-2020-1968177
2
https://databd.co/profiles/industries/profile-consumer-electronics

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be of good quality with competitive prices. There are also a number of cheap Chinese
brands operating in the market.

TABLE 1: PROMINENT LOCAL AND INTERNATIONAL BRANDS

PRODUCT CATEGORY Local Brand International Brand
TELEVISION Rangs, Walton, Vision, Singer, MyOne Sony, Samsung, Panasonic, Toshiba, Phillips, LG, Sanyo.
REFRIGERATOR Walton, MyOne, Minister. Samsung, Whirlpool, Kelvinator, LG, Hitachi, Haier.
AIR CONDITIONER Butterfly, Walton. General, LG, Daikin, Gree, Carrier, Whirlpool.
HOME APPLIANCES Walton, Electra, Singer, Eco+. Miyako, Sebec, Panasonic, Sharp, Steamfast.

DEMAND DRIVERS
Growth in urban population, per capita income and increased access to
electricity are main growth drivers
Growth in Middle and Affluent Class (MAC- monthly household income of around $400
or greater) consumers is one of the main growth drivers of this industry as with more
affluent customers, more people will be able to afford products from the consumer
electronics industry. MAC population generally tend to be more brand conscious than
the lower income people. According to a study by Boston Consulting Group (BGC), MAC
population of Bangladesh is expected to reach 34 million by 2025 which was 12 million
in 2015.3 Average growth of MAC population of Bangladesh is 10.5% annually which is
higher than its neighboring countries such as Indonesia (7.8%), Myanmar (7.9%) and
Thailand (4.9%) etc.4

Chart 3: Per Capita Income of Bangladesh (in $) Chart 4: Urban Population (% of Total Population)

2,227
2,064
1,909 2000 23.6%
1,751
1,610
2005 26.8%

2010 30.5%

2015 34.3%

2020 38.2%
2016-17 2017-18 2018-19 2019-20 2020-21

Source: Ministry of Finance Source: World Bank

Along with growth in the MAC population, growth in per capita income will also fuel
demand for consumer electronics products across all product segments. Per capita
income of Bangladesh has increased at 8.72% in the last 5 years. According to
Bangladesh Bureau of Statistics (BBS) data, per capita income of Bangladesh was
$1,466 in 2015-16 which has increased to $2,227 in 2020-21. In the October 2020
World Economic Outlook, IMF had forecasted that Bangladesh’s per capita income will
overtake India’s per capita Income in 2020. S&P, the world’s foremost rating agency,
has predicted the Per Capita Income of Bangladesh to reach $2,363 by 2022. 5
Another demand driver of the consumer electronics industry is urbanization. Increasing
urbanization indicates rising literacy rate, growing middle class & white collar jobs, which

3
https://www.bcg.com/publications/2015/bangladesh-the-surging-consumer-market-nobody-saw-coming
4
https://thefinancialexpress.com.bd/views/higher-middle-class-density-helps-inclusive-growth-1610808805
5
https://www.tbsnews.net/economy/bangladesh-economy-overcome-covid-impact-12-months-sp-293398

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are all conducive for growth in demand for consumer electronics goods. Urban
population has grown immensely from 30.50% in 2010 to 38.20% in 2020 as a result
of increase in the per capita income and government investment in infrastructure
projects.6
Though export contribution is still insignificant, the industry bears huge export
potential for future riding on the favorable policy support from the government
Export of consumer electronics products from Bangladesh is quite low compared to the
Chart 5: Export of Electric Products (In potential export. The reason behind this is lack of technical knowledge
million $) and production capacity. However, Walton Hi Tech industries limited
have been focusing on exporting their products in a diversified set of
68.94 67.48
65.00 61.96 61.21 markets over the last few years and made significant strides. Export of
39.39 electric products have suffered 35.6% decline in 2019-20 mainly due
to slowdown in the global economy and cancellation of orders due to
Covid-19. However, in 2020-21, export of electric products have
increased by 71.3% to $67.48 million from 39.39 million in the
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
previous year. Some of the top export destinations of the electric
products of Bangaldesh are Japan, Nepal, United Arab Emirates,
Source: Export Promotion Bureau
Singapore, India, Hong Kong, Kuwait, Australia etc. Bangladesh’s duty
free access to EU and other developed countries can be utilized to increase exports of
consumer electronics products.
Export of WALTONHIL, the major exporter of consumer electronics product from
Bangladesh, has expanded from 59.70 mn BDT in 2018-19, to 139.93 mn BDT in 2019-
20 to 1195.53 mn BDT in 2020-21. Refrigerator & Compressor and Television were the
biggest export items of WALTONHIL in 2020-21 contributing 47.28% and 36.47%
respectively.
Increased access to electrification will continue to be a major growth driver
Increased access to electrification is another driver for growth in the consumer
electronics industry. Among the 20 countries with largest electricity deficits, Bangladesh
is one of the three countries who made the greatest improvement since 2010 and one
of the eight countries whose expansion of access to electricity kept pace with the
population growth. 7 As of 2021, the number of power center is 146, the total power
generation capacity is 25,235 MW and the imported electricity amount is 1,160 MW.
Currently, 99% of the Bangladeshi population have access to electricity and the total
number of customer of electricity service is 40.90 million.8

Table 2: Power sector Comparison between 2009 and 2021

Products 2009 2021
Number of Power Plants 27 146
Power Generation Capacity (MW) 4942 25235
Highest Power Generation (MW) 3268 13792
Transmission Line (Sq. Km) 8000 12962
Capacity of Grid Sub Stations 15870 52679
Electricity Import (MW) - 1160
Distribution Line (Sq. Km) 260000 614000
Access to Electricity (% of Population) 0.47 0.99
Per capita Electricity Production (kw.h) 220 560
Number of Electricity Customers (In mn) 10800000 40900000
Total System Loss 0.1433 0.0849
Source: Powercell

6 World Bank

8 Powercell
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Import is expected to decline driven by the policy support

Import in 2019-20 of the Television products was 3.02 million units worth BDT 3.18
billion, Air condition machines was 19.89 million units worth BDT 11.21 billion and
Refrigerator was 13.43 million units and worth BDT 8.67 billion.9
Table 3: Import of Consumer Electronics Products
With regulatory incentives and increased investment from
Number of Units (In mn)
Products both local and multinational companies to manufacture
2019-20 2018-19
consumer electronics products in Bangladesh, import
Television 3.02 3.02 share of the total demand for consumer electronics
Air Conditioners 19.89 14.45 products can be expected to go down in the coming fiscal
Refrigerator 13.43 21.06 years.

Popular Models:
(a) CRT TV,
(b) LCD TV below 30 inches
Main Sales Period:
World Cup, Eid Festivals,
Pahela Boishakh, Durga Puja
Sales Strategy:
Promotional offers, extended
guarantee & warranty period.
Recent Investment:
Company: LG
Local Partner: Fair Electronics
Investment: BDT 10 Billion
Capacity: 30,000 Smart TVs
per annum
Models: 20
Plant Area: 32,000 Sq Ft.
Main Exporter: WALTON
Export Destination: Germany,
Greece, Ireland, Poland, Spain
etc.
SEGMENT: TV
Festive occasions contribute to the bulk of TV sales and the demand for
branded LCD & other new design TVs are rising
Low priced CRT TVs are popular
among low income consumers and Figure 1: Popular Models of Television in Bangladesh
after that LCD televisions below 30
inch size are also owned by a
significant number of consumers.
Annual demand for TV in Bangladesh
is around one million unit a year. With
rise in income, people tend to trade
up and look for better quality and
more expensive TVs. Most of the TV
sales happen around different festive CRT TV LCD TV below 30 inches
occasions such as World Cup, Eid
Festivals, Pahela Boishakh, Durga Puja etc. Companies give promotional offers,
extended guarantee & warranty period to maximize their sales in these periods. The
current market size of TV is BDT 35 billion with Walton group being the market leader
with 27% market share. 10
Recent Investments
LG through its Bangladeshi local partner Butterfly, has invested $100 million to establish
LED TV, refrigerator and air conditioner manufacturing plant in Bhaluka, Mymensingh.
Fair Electronics, local partner of South Korean electronics giant Samsung, has invested
BDT 10 Billion in building a plant to achieve the goal of manufacturing 300,000 Samsung
Smart Television each year. The plant area is 32,000 square foot and the plant will
produce 20 models of Samsung TV of seven sizes. In this factory, Fair electronics will
also manufacture Televisions with most innovative technologies such as Quantum light-
emitting diodes (QLED). Before the inauguration, Fair Electronics had already
manufactured 50,000 to 60,000 TVs in that plant along with its state of the art 85 inch
QLED TVs.
Export Potential
Bangladesh has huge potential in the TV export industry. Walton has been leading the
way with it declaring that it’s TV export in 2020 was 10 times higher than what it was

9 Foreign Trade Statistics of 2019-20 by Bangladesh Bureau of Statistics

10
https://www.tbsnews.net/economy/corporates/walton-grows-riding-tv-and-ac-business-307888

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2019. Walton’s TVs are currently being exported to 35 countries and some of the main
destinations are Germany, Greece, Ireland, Poland, Spain etc. 11

SEGMENT: AC
Increased number of customers in the middle and lower middle class will drive
the AC sale of the local manufacturers
In the local market, three
Figure 2: Popular Models of ACs in Bangladesh
Types: (1) Cassette, (2) types of Air Conditioners that
Ceiling, (3) Split.
are sold- cassette, ceiling and
Main Sales Period: Summer
Sales Strategy: Offering split. The market leader by
affordable price, discount offers number of units sold is Walton
and reliable after sales service.
Prospective customer
with General (UK company)
segment: Middle and lower being followed in the second
middle class. place. Local companies are
trying to capture market
Cassette Ceiling Split share by offering affordable
price, discount offers and
reliable after sales service. Most of the AC sales happen during the summer. An one
tonne AC can now be purchased within BDT 30,000-40,000 range which used to cost
around BDT 100,000 five years ago. As ACs are becoming more affordable with the
introduction of local manufacturers, people from middle and lower middle class have
been opting to purchase ACs in the recent years.
Current demand of AC is 0.5 million units annually and the market size is BDT 65 Billion.
Current Demand: 0.5 million The annual growth rate of AC demand has been around 20% for the last 6 years.12 Local
units per annum
Market Size: BDT 65 billion
companies fulfill 70% of the market demand. As of now, Walton, MyOne, Unitech,
Growth Rate: 15% Transcom Digital, Vision, Jamuna and Butterfly manufacture or assemble air
Local Assemblers & conditioners locally. Industry players expect the market size to reach BDT 50 billion in
Manufacturers: Walton, MyOne,
Unitech, Transcom Digital, Vision, 2021. In local manufacturing, almost 70% of the parts required to manufacture an AC
Jamuna and Butterfly. is imported which includes compressors and other technical components.13 Several
international companies have also started investing in manufacturing or assembly plants
by partnering with local companies. Samsung has launched its new AC production plant
at Shibpur in Narshingdi with its local partner Fair Electronics on January, 2021. Since
start of the production, cos of production and price have been reduced. Samsung
produces inverter ACs to help users save on energy cost.
In the April-May period of 2021, air conditioners sales have skyrocketed for the AC
 Air conditioner sales have manufacturers and marketers. 400% higher sales was posted in April by Samsung.
skyrocketed in 2021’s
summer
Walton’s sales was 450% higher in the January to April period compared to the same
 Companies introduced period last year. Esquire Electronics, Vision and Samsung have also posted 250%, 100%
innovative products to face and 300% growth in this year’s summer season respectively. Consumer electronics
the challenge of pandemic
companies have also come up with innovative products to face the challenge of
Coronavirus pandemic. Walton has introduced models of inverters ACs with features
such as dual defender, ionizer and ultraviolet care which can keep the room free from
virus and bacteria. 12

11
https://tbsnews.net/companies/walton-records-10-times-higher-tv-export-2020-amidst-pandemic-185884
12
https://www.thedailystar.net/business/news/ac-sales-triple-temperature-soars-2100309
13
https://www.thedailystar.net/business/news/local-production-cools-down-ac-prices-2035185

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SEGMENT: REFRIGERATOR
Local Manufacturers & assemblers are gradually taking away market shares
from the imported refrigerators.
Chest freezer, frost and non-frost
Figure 3: Popular Models of Refrigerators in
refrigerators are the most sold
Bangladesh
Refrigerator categories in
Bangaldesh. Around a decade ago,
almost all the local demand of
refrigerators were fulfilled by
imported products. However, the
industry scenario have changed in
an opposite direction over the last
Chest Freezer Frost Non-Frost
decade and now 77% of the
Refrigerato Refrigerator
Chart 4: Market Shares (%)in Refrigerator current demand are fulfilled by locally manufactured
Segment refrigerators. Companies that are currently manufacturing or
assembling refrigerators locally are Walton, Transcom,
Minister, Vision, LG, Jamuna, Singer Bangladesh and
15.9% Samsung. Increasing access to power capacity has
encouraged the refrigerator manufacturing companies to start
3.0% manufacturing locally. Almost half of the total refrigerator
3.1%
gets sold during the Eid-ul-Azha season. During this festival,
5.7%
livestock are sacrificed and the meat is preserved in
6.3% refrigerators which leads to an increase in sales by 40% to
66.0%
50%. Companies offers discounts, cashbacks and prizes to
boost their sales during this period.
Walton Singer Marcel Butterfly Jamuna Others
Refrigerator sales in 2019-20 were 3.2 million units. The
Source: Marketing Watch Bangladesh
annual growth rate in this sector is estimated to be around
11.42%. The current refrigerator market size has grown by
Figure 4: Companies Manufacturing/Assembling $131 million from 2018 to reach $680 million in 2020. The
Refrigerators in Bangladesh
market size is forecasted to reach $878 million by 2022.14
Walton is the current market leader in this segment with 66%
market share. Following Walton, multinational company
Singer has 6.28% market share, Marcel (an associate brand
of Walton) has 5.7% of market share, Butterfly (local partner
of LG) has 3.14% market share and Jamuna Electrics has
2.99% market share. 15

Recent Investments: LG butterfly has invested $55 million to set up manufacturing facilities with capacity of
LG Butterfly: $55 million 1,400 units per day. Walton Hi-Tech industries Limited has increased its production
investment, 1,400 units of
capacity per day capacity to 2 million units in 2020 from 1.5 million units in 2017. Transcom Electronics
Walton Hi Tech Industries have been assembling refrigerators in Bangladesh since 2014. Vision electronics,
Limited: Capacity Increase
by 0.5 million units
established in 2016 and a sister concern of Pran- RFL group also manufacture 75 models
Samsung: Capacity of of refrigerators in Bangladesh and their daily capacity is 1,000 units per day. Fair
400,000 units per year Electronics, partnering with Samsung had established a manufacturing plant in
Narsingdi in 2018 with a capacity of 400,000 units per year. However, customers still
prefer imported refrigerators in the premium segment. 16

14
https://www.tbsnews.net/economy/industry/spectacular-rise-refrigerator-market-209518
15 https://www.prothomalo.com/business/analysis/ফ্রিজের-বাোজর-এখন-দেশীয়-ব্র্যাজের-োপট
16 https://www.thedailystar.net/business/samsung-opens-two-appliance-plants-bangladesh-1420264

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SEGMENT: HOME APPLIANCES

Foreign brands dominate the market with local brands vying to capture more
market share.

The major local players in the home appliance market are Walton Group, Transcom
Home Appliances: Electronics, Rangs Electronics, Rangs Toshiba, Singer Bangladesh, Best Electronics,
Market Size: BDT 15 billion MyOne Electronics, Jamuna Electronics, Pran RFL (Vision), Esquire Electronics, Electra
Market stake of
International Brand: BDT
International, and Super Star Group. The major foreign brands in this segment are
2.5 billion Samsung, LG, General, Sharp and Whirlpool.17 The main factors that impact home
Kitchen Appliances: appliances sales are price, brand name, quality, service and special offers.
Market Size: BDT 6.5 billion
Growth rate: 10%-12%
The market size of home appliances is Figure 5: Home Appliance Products of
around BDT 15 billion and international Walton Hi Tech Industries Limited
brand’s stake in the market is worth
BDT 2.5 billion. Market size of Kitchen Washing Machine, Room Heater, Geyser
Appliances stood at 6.5 billion in 2020. Or Water Heater, Oven, Electric Kettle, Rice
Annual growth rate of this sector is Cooker, Blender And Juicer, Induction
Cooker, Electric Lunch Box, Hairdryer,
10%-12%.
Trimmer, Shaver Etc.
Recent Investments
Recent Investments:
Samsung Bangladesh:
In 2017, Samsung Bangladesh opened two new factories to manufacture four consumer
Opened two new factories electronics products which included microwave oven. Transcom Electronics has started
Transcom Electronics: to sell home appliance products of famous American brand Black from March, 2021. The
Distributing products from the
American brand Black products that will be sold by Transcom Electronics are Dry Iron, Grinder, Vacuum
Rangs Electronics: Cleaner, Electric Cooker and Sandwich Maker. Rangs Electronics will make $80 million
Investment- $80 million,
Production Capacity-0.15
investment in 32 Acres land of Bangabandhu Hi-Tech Park in Sylhet where along with
million units Refrigerators, Televisions and Air Conditioners, they will also build a production capacity
of 0.15 million for Home and Kitchen appliance products. 18

LOCAL PHONE ASSEMBLY AND MANUFACTURING

 60% of feature phones are
made or assembled in
Bangladesh
 Estimated market size is BDT
100 billion
 2019-20: Local manufactured
units- 16.21 units, Imported
units- 13.27 units.
Regulatory incentives and high import duties have boosted the local phone assembly
and manufacturing
Local phone assembly has picked up in Bangladesh since 2017. Before that, Bangladesh
used to import 100% of the local demand for handsets. Since then, local plants have
started importing small parts and started assembling them locally. Currently 60% of
feature phones are made or assembled in Bangladesh and the local companies are
working to be able to meet 100% of the demand locally. As local production soared,
import of illegal and fake handset dropped. As on January 2021, 33 million mobile
handsets were made in the past one and a half year and 18.8 million in the six months
before that. The handset market is estimated to be around BDT 100 billion. 19 Total
number of manufactured and imported handsets in 2019-20 was 29.48 million units out
of which 16.21 million units are locally manufactured and 13.27 million units were
imported. 20 Among the handsets, 77% phones are 2G feature phones, 5% are 3G
phones and 18% are 4G phones. 21

There are currently 12 companies who have license to make mobile handsets. They are
Walton Digi-tech Industries Ltd, Fair Electronics (Brand- Samsung), Edison Industries
(Brand- Symphony), Alamin and Brothers (Brand- 5 Star), Carlcare Technology BD Ltd

17 https://www.thedailystar.net/business/retail/news/online-orders-boost-home-appliance-sales-2083901
18
https://www.dhakatribune.com/business/2021/03/01/rangs-electronics-eyes-top-spot-in-domestic-appliance-producer
19
https://bdnews24.com/business/2021/01/31/bangladesh-eyes-to-end-import-as-local-plants-assemble-manufacture-mobile-phones
20
https://www.tbsnews.net/bangladesh/telecom/nokia-ready-made-bangladesh-smartphones-241522
21
https://www.thedailystar.net/business/economy/banks/news/remittance-sinks-16-month-low-2190281

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 12 companies have license to
manufacture mobile handsets
locally
 Vibrant software ltd. will
invest $40 million to start
manufacturing 500,000 Nokia
phones per month
 High import duty and tax
exemption for local
manufacturers and assemblers
is driving the local phone
assembly and manufacturing
22
https://asia.nikkei.com/Business/Telecommunication/Bangladesh-draws-smartphone-assembly-as-brands-eye-growing-market
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(Brands -itel and Techno), Anira International (Brand- Yunstar), Best Taicool Enterprise
Ltd (Brand- Vivo) , Grameen Distribution (Brand- Lava), Banglatrinic Technology
(Brand- DTC), Benley Electronic Enterprise (Brand- Oppo), Okay Mobile and Mycel
Technology. Samsung Bangladesh along with its local partner Fair Electronics have
started to assemble smartphones since 2018 and currently 100% of the local demand
for Samsung phone is being assembled locally. Carlcare Technology BD Ltd. has started
its operation since 2019 and currently manufactures 5.5 million units of handsets of
Techno and itel around 1.5 million units of handsets per year. Walton produces 4 million
feature phones and 400,000 smartphones annually.19 Vibrant Software ltd. will start
manufacturing Nokia phones and the target is to manufacture 500,000 handsets a
month. The total investment will be $40 million and the plan will be in Bangabandhu Hi-
Tech city in Gazipur. Xiaomi and Motorola are also working on plans for local production.
Some of the local phone makers have started to consider exporting. Walton is
assembling phones for a foreign brand for export and has exported its handsets to Nepal.
Fair group who manufactures Samsung products is also eyeing the export market. 22
High import duty and tax exemption for local manufacturing are the two main factors
that is driving the local phone assembly & manufacturing industry. Up to 60% tax is
required to pay to import a handset while the local manufactures are not require to pay
VAT while the plants assembling handsets is only required to pay 5% VAT.
BUDGETARY POLICY AND REGULATORY INCENTIVES
Recent budgetary policy measures will bring down production costs and
encourage local production industry
Recent budgetary policy measures for consumer electronics industry:
Table 4: Budgetary Policy Measures (2021-22)
 Reduction of import duty to 5% from 25% on Flat-Rolled Iron or Steel, Width >=600mm, Electro-
Plated or Coated with Zinc imported by industrial IRC holder VAT compliant TV manufacturing
Industry;
 Reduction of import duty from 10% to 5% in Flat-rolled products of iron or non-alloy steel
electrolytically plated or coated with zinc imported by consumer electronics good manufactures;
 Extension of existing VAT exemption facility for manufacturing of refrigerator, freezer and its
compressor for one more year;
 Extension of existing VAT exemption facility for manufacturing of air conditioner and its
compressor for three more years;
 Exemption of Vat at production level in manufacturing of washing machine, microwave oven and
electric oven.
 Inclusion in HS code of two raw materials required for compression manufacturing- Hot Rolled
Steel Pickled and oiled (Thickness from 3mm to less than 4.75 mm, width more than 600mm or
more) in coil & Aluminum Winding Wire;
 Inclusion of four raw materials in the HS code which are required for manufacturing washing
machine.
EQUITY RESEARCH
Home Appliances & Consumer Electronics Market Review
 There were strict lockdowns in
the two different Eid Seasons
which affected the Consumer
Electronics Industry Sales.
 Reduced purchase power
duiring the lockdown period
negatively affected the sales
growth
 Coronavirus worked as a boon
for the kitchen appliance as a
result of more people opting
to dine at their home.
 Consumer electronics sales
recovered during 2021
despite covid-induced
restrictions
 Discount offers, EMI
facilities, promotional
offers of banks were some
of the key drivers behind
the sales growth
23
https://www.thedailystar.net/business/news/kitchen-appliance-sales-surge-during-pandemic-2054017
24
https://www.thedailystar.net/business/retail/news/online-orders-boost-home-appliance-sales-2083901
Page 10 of 11
This research report is a property of EBL Securities Ltd. | Bangladesh | 14th October 2021
N.B.: Disclaimer of the EBL Securities Ltd, the author(s) certification and rating definition have been provided at
the end of the report.
COVID-19 IMPACTS ON CONSUMER ELECTRONICS INDUSTRY
As a result of Covid-19, it was projected by various market players that that, the sales
of consumer electronics in 2020 stayed below the 70% of annual target of the Consumer
electronics sales as consumers have become more reluctant to spend on luxury items
amid the ongoing pandemic. One of the methods consumer electronics companies tried
to use during
Table 5: Covid-19 impact on Walton’s sales
Covid-19 to sell
Sales Sales Change
their products to Products (Mar’20- Aug’20) (Mar’19- Aug’19) (%)
customers is
Refrigerators 10,000,000 15,000,000 -33.33%
through online
Television 2,000,000 3,000,000 -33.33%
retail platforms.
Air Conditioners 42,000 54,000 -22.22%
However, despite
the use of different promotional methods, consumer electronics companies failed to
achieve minimum sales target during both the Eid Seasons of 2020. 50% of the total
sales each year are generally generated during the two Eid seasons which got badly
affected during Coronavirus. Walton Hi-Tech Industries Ltd.’s refrigerator, television
and air conditioner sales have been declined to 1 million units, 0.2 million units, 42,000
units respectively in Mar’20- Aug’20 period from 1.5 million units, 0.3 million and 54,000
units in the same period previous year. However, export orders for Walton have
increased significantly during this period.1
Refrigerator sales suffered during this period due to Coronavirus pandemic. Besides,
many private sector companies paid their employees reduced wages and Eid bonuses to
do cost savings in that dire period which had led to reduced spending from the customers
during the Eid-ul-Azha period, the main season for refrigerator sales. Companies also
struggled to operate their outlets at full capacity during this period.
During Coronavirus, low end consumer electronics products suffered the most than the
high end products as the low income consumers have seen the most hit in their income.
However, Coronavirus came as a boon for the kitchen appliance sector as its sales saw
a massive upsurge during this period. As during Coronavirus pandemic, dining out has
become less common and as a result more people opted to purchase electronic kitchen
appliances to prepare food in their home. The market has witnessed 55% growth in
2020 when the average market growth rate is 10%-12%. During this period, demand
for ovens, rice cookers, blenders grew by 40% to 200%.23
Although the lockdown period continued in 2021 as cases and deaths soared during April
and July as the highly contagious delta variant spread in Bangladesh. Despite several
lockdown periods in 2021, home appliance & consumer electronics sales fared better
compared to 2020 as lockdown restrictions were less stricter and a boost in online sales.
As middle and higher middle income consumer groups couldn’t spend their disposable
income in travel or tourism, a portion of that disposable income was also spent on
consumer electronics. Discount offered by consumer electronics companies, promotional
offers of banks, EMI facilities etc. were some of the key drivers that boosted both online
and in-store sales in 2021. According to Walton Group, sales in the March-April period
of 2021 was three times higher for them than that of the same period in the previous
year. Singer Bangladesh had come up with an innovative service “One Call. That’s All”
to counter the covid-19 caused restrictions where just by making a phone call,
customers will receive their product delivered to their address within 24 hours. 24
EQUITY RESEARCH
Home Appliances & Consumer Electronics Market Review

INDUSTRY OUTLOOK
Higher purchase and more electricity connections will drive the consumer
electronics industry’s demand. Innovative promotional methods and
innovative products will be introduced in the market.
Two main growth drivers of the electronics consumer industry will be hire purchase and
Main growth drivers:
(1) Hire purchase new electricity connections across the country.
(2) New electricity connections
Consumer electronics products generally used to be considered as “high end luxury
products” however they are now considered as regular household necessities with the
growth of MAC population and urbanization in Bangladesh. Sensing on this opportunity,
consumer electronics companies have started to provide different Equal Monthly
Installment (EMI) offers and banks have also joined in with a variety of credit card
offers.
 Consumer electronics
products are transforming Bangladesh has the potential to become a consumer electronics manufacturing hub.
from high end luxury Lower labour costs, growing expertise and capability in IT sector & light engineering,
products to regular government incentives to invite FDI can make Bangladesh an attractive consumer
household necessities
 EMI and variety of credit electronics manufacturing destination.
card & other offers are
becoming more common Financing purchase of consumer electronics and digital goods will be made easier and
more attractive over the time as the government’s vision is continuous digitalization of
Bangladesh. Bangladesh Bank has recently revised the rules to allow a maximum of
70% loans from previous 30% against the purchase of digital devices such as
computers, laptops, smartphones and tablets.

Samsung, a South Korean multinational consumer electronics company have announced

 Samsung applying new
technology to make ACs
more eco-friendly
 Singer Bangladesh
launching 4k frameless
Android TV”. This will
improve the viewIng and
gaming experience.
plan to build its first air conditioner (AC) manufacturing plant on January this year with
the stated goal to manufacture 30,000 units annually. Samsung has forecasted that,
this plant will have a 30% value addition and the retail price may drop by 25%-30% as
a result of that. Within five years, Samsung wants to increase annual production to 1
million unit. T series is a new technology which Samsung is going to use in their AC
production that will make their products more eco-friendly. Fair Electronics, a concern
of Fair Group, is the authorized manufacturer of Samsung mobile phones and consumer
electronic products in Bangladesh.25

Singer Bangladesh launched “4K Frameless Android TV” whose frameless design will
improve the viewing and gaming experience by getting rid of distractions like control
buttons. Additionally, 4K resolution, Dolby Vision, and PureSound Speaker with the
surrounding sound system will give the viewers an experience of being in the middle of
a movie, show, or game. As an Android TV it has all the Google features such as Google
Assistance, YouTube, Chromecast, and many more. It comes with built-in Netflix, which
will help customers to enjoy popular shows and movies with a dedicated button and
voice control.

25
https://tbsnews.net/economy/industry/samsung-starts-manufacturing-acs-bangladesh-192748

Page 11 of 11
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N.B.: Disclaimer of the EBL Securities Ltd, the author(s) certification and rating definition have been provided at
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