Electrical appliance industry sparks up: El Niño predicted to surge sales by 4-5%
The El Niño weather phenomenon could potentially stimulate a 4 to 5% rise in sales within the electrical appliance and electronics industry this year, with sales projected to elevate from 230 billion baht last year.
Major electrical appliance distributors and leading retail chains noted growth in the market within the first nine months of the year.
Despite the purchasing power of low-income groups not fully recovered, they anticipate this growth trend to continue at a rate similar to last year. This is due to several challenges such as high household debt, inflation, and lack of government stimulus packages to enhance consumer spending.
Jakkrit Keeratichokchaikun, Chief Executive of Trading at The Mall Group Co, highlighted several factors contributing to the sales of electrical appliances this year. These include an increase in tourist arrivals, innovative product launches across multiple brands, and a heightened demand for larger appliances like televisions and refrigerators.
A shift towards the premium market segment has also been observed. With a potential increase in the minimum wage, products like dishwashers and washing machines have seen a surge in demand.
Jakkrit predicts that the overall electrical appliance market in Thailand, including IT and mobile phones, will grow by 5% to 245 billion baht this year, largely due to the El Niño phenomenon. He remains optimistic about the electrical appliances industry’s prospects next year, given that the government introduces more campaigns to boost the spending power of low-income earners.
Amnaj Singhachan, Senior Marketing Manager of LG Electronics (Thailand) Co, noted a nearly 100% increase in demand for LG air conditioners during the first nine months of the year, thanks to El Niño.
In September alone, LG witnessed a remarkable 60% year-on-year sales increase. This is particularly noteworthy as September and October are historically considered the low season for air conditioner demand.
According to Amnaj, rising electricity costs have led consumers to opt for inverter air-conditioners. The prolonged hot weather due to El Niño further boosted the demand for air-conditioning products.
He believes this trend will continue into next year, prompting LG to offer a variety of air-conditioner models at different price points to cater to consumer preferences.
Regarding the daily minimum wage increase, Amnaj stated that the company needs to increase product sales to achieve economies of scale and optimise product shipments from foreign and local suppliers for greater efficiency.
He predicts LG’s sales to grow by 20% to 15 billion baht this year, a significant jump from the initial 12% projection made earlier this year.
Promising Investments for Electrical Appliances
In response to the promising outlook for the electrical appliance industry, Ratchata Suttapattanon, Chief Business Officer of the Specialty Business Group at The Mall Group Co., announced a 400 million baht investment to revamp two Power Mall stores located in Bang Kapi and Bang Kae.
This redevelopment will expand the floor space from 4,000 square metres to 5,000 square metres, allowing for a wider range of brands and larger electrical appliances, previously only available at downtown branches of Power Mall.
To incentivise spending, Ratchata announced that The Mall Group has partnered with over 200 brands to launch the Power Mall Electronica Showcase at all branches of Power Mall, which continues through Oct 31, reported Bangkok Post.
Suwin Koseeumnuay, Head of the Consumer Electronics Team at Samsung also expressed positivity about Thailand’s electrical appliance market next year.
With the El Niño phenomenon likely to continue, he anticipates a sustained demand for air-conditioning products. Consequently, Samsung has introduced air-conditioners equipped with smart features aimed at helping consumers reduce their living costs.
Suwin also expects the government’s digital wallet initiative to boost overall sales of electrical appliances, although the impact would depend on the campaign’s details.
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