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TODAY AND TOMORROW

By EHTESHAM ALBARI
Dec 22 - 28, 2003

The changing lifestyle have redefined the consumer needs and demands which has resulted in shifting technology for mass media production of consumer electronics in todays world.

In Pakistan the use of electronic equipments has increased remarkably due to availability of electricity, purchase potential and availability of goods for branded and low priced categories.

OVERVIEW

KITCHEN APPLIANCES

Appliances used in kitchens such as food processors, choppers, juicers and other similar products are being sold in huge quantities. The major contributing brands are Black & Decker Anex, Braun, Maulinex, Kenwood and rest is all of Chinese origin handled by local brands.

HOME APPLIANCES

In home appliances major demand is catered by local brands such as Waves, Dawlance and PEL rest is branded and Chinese. The estimated demand for airconditoner in Pakistan is around 130,000 units, refrigerator over 350,000/- units in which 80% share is of direct cool category, for microwave ovens the share is 125,000 units, washing machines is over 400,000 (85% share is of washer type), demand for vacuum cleaners although have decreased in developed urban areas due to tiled flourings but constitute a share of around 30,000/- units per year.

TELEVISIONS

The total demand for televisions is around 600,000 units which constitutes b/w and color televisions. The major players are Sony, LG, Samsung but now some Chinese originated local brands have also pop up.

MISCELLANEOUS (FAN, LIGHTENING AND ETC)

Since electric fans are locally produced their demand exists and now the key brands have brought innovations in fan looks and colors in order to attract customers and maintain their existence in houses where airconditioners are used. In bulbs and tubelights besides Phillips some Chinese origin products such as in bulbs have brought cheaper prices.

INDUSTRY COMPETITION

The entry of Chinese products into the market has brought competition for the local and imported brands, not on quality side but on pricing side. But in some categories the competition is between brands to brands such as in TV, LG vs Sony or Samsung.

EMERGING BRANDS

SAMSUNG: Samsung by virtue of its global presence and strong base have entered into the market from various fronts such as home appliances, audio video and mobiles. If it shock absorbers to counter the price impact of local and Chinese brands then it has an advantage in selling in quantities. Otherwise it can be successful in image market and will cater the quality conscious customers. In some categories like TV and microwave oven Samsung have started local assembling which is another positive sign for them.

HAIR: Among the leading brands of China, hair has gradually taking its place up into the market. With effective advertising it is trying to give it more as a brand look and trying to keep its image better than cheaper Chinese products. Hair has also engaged in local assembling of refrigerators and washing machines which is added point for Hair.

SUSTAINABLE BRAND

DAWLANCE: With its strong dealer base, local assembling and price advantage will remain a successful brand in the market.

LG: Although it is striving hard for some of its categories e.g. home appliances and mobiles but has proved to be a sustainable brand with its marketing advantage and dealer presence.

Threats for locally assemble and imported brands;

* influx of Chinese products.
* duty advantage @ 30% on valuation of Chinese imported electronic items.
* price sensitive market
*
price factor in consumer purchase decision.

OUTLOOK

Before the imposition of WTO in 2005, the market will witness:

* Chinese products sweeping the market
* sourcing of products from China by local or known brands.
* survival for the fitest (price sensitive) by the imported brands.
* negative price growth of products.
* shift from branded to local or Chinese cheaper brands.
*
some leading brands like Samsung, LG will acquire assembling facility in order to have some duty advantage to absorb some of the prices.