With a market size of 2.4 billion US dollars, or approximately 26 thousand crore BDT, the consumer electronics sector is one of Bangladesh’s most rapidly growing industries. What was once a fully import-dependent sector is now dominated by local brands across most product categories. For example, in the refrigerator market, only 3 out of every 100 products sold are imported. Walton holds a significant share of this market. In fact, most of the beverage refrigerators you see in supermarkets, wholesale, and retail stores across the country are manufactured by Walton. Beyond the domestic market, Walton exports products to more than 40 countries, including North America, Europe, South Asia, and the Middle East. How has this company, which has been operating for nearly three decades, managed to compete with some of the biggest and oldest tech companies in the world? We will explore this in today’s video.
Overview
The journey of Bangladesh’s consumer electronics sector began in the 1950s when a few private companies were established to assemble radio sets. In the following decade, these assembly plants also began assembling television sets. However, following the country’s independence, the sector became almost entirely import-dependent. In the 1980s, a few assembly plants were again established in Bangladesh for the manufacture of small electronic appliances like radios, televisions, audio players, and video cassette players. Walton entered Bangladesh’s electronics market in 1997. Shortly after, several other local companies began operations in the electronics industry. According to the Financial Express, during that time, these domestic companies started assembling products by importing various electronic components and parts to add local value.
In 2007, with the establishment of ‘Walton Hi-Tech Industries Ltd.,’ the company began manufacturing refrigerators, freezers, and air conditioners in its own manufacturing plant. As a result, Walton was able to offer competitive pricing compared to global brands, which sparked interest among Bangladeshi consumers in purchasing local brand products. Following Walton’s success, other local brands also began manufacturing various home appliances on a smaller scale. These companies primarily imported a few technical components while producing the rest locally, allowing them to gain competitive pricing advantages over foreign brands. Meanwhile, several foreign brands established joint ventures with local companies to set up assembly plants to benefit from tax and VAT advantages for assembling and manufacturing electronics locally. Among them, South Korean tech giant Samsung established two units in Bangladesh in 2017 in joint ventures with Transcom Group and Fair Electronics. Similarly, another South Korean giant, LG, established a plant in 2018 in partnership with the local company Butterfly.
Walton, on the other hand, started exporting its locally manufactured electronic products abroad as early as 2011, alongside serving Bangladeshi consumers. Today, the company exports its products to 40 countries, including Middle Eastern and African nations and European countries like Germany and Romania. Additionally, it has established branches and liaison offices in six countries, including the USA, South Korea, India, Nepal, and the UAE, further solidifying its global presence. To strengthen its global presence, Walton established a subsidiary in the USA in 2021. Furthermore, according to information submitted by Walton Hi-Tech Industries Limited to the Dhaka Stock Exchange in April 2022, Walton acquired the Italian compressor brand Acc, along with two other European brands, to reinforce its position as a global brand. According to The Daily Star, Walton currently holds 75% of Bangladesh’s refrigerator market. But how did this local brand manage to surpass some of the world’s largest home appliance manufacturers to dominate Bangladesh’s refrigerator market?
How Walton Became the Market Leader
Bangladesh’s electronics manufacturers started assembling products in the late 1990s and began offering products at more affordable prices compared to international brands. However, at that time, most companies still had to import the majority of parts and components, which limited their ability to offer products at even more affordable prices. Moreover, maintaining quality and standards while keeping prices low was a tough challenge. Walton identified this issue and set a goal to manufacture all refrigerator parts locally in Bangladesh. In 2003, the company formed its own Research & Innovation (R&I) team. After five years of research and development, Walton established its own manufacturing plant in 2007 and went into full production.
But Walton didn’t stop there. The company made several strategic acquisitions to strengthen its position. One of the most important components of refrigerators and air conditioners is the compressor. To enhance its capability in compressor manufacturing, Walton acquired a plant in Austria in 2015. Then, in 2017, Walton established the first and only compressor plant in Bangladesh. Only 15 countries in the world manufacture compressors, and Bangladesh became the eighth country in Asia to achieve this capability, thanks to Walton. Alongside increasing its manufacturing capacity, Walton also focused on improving product quality.
Walton first exported refrigerators to Nepal in 2011. From that initial experience, the company gained a deeper understanding of the need to maintain international quality standards when exporting to global markets. All of Walton’s refrigerators undergo testing in the NUSDAT-UTS testing lab, where they are tested against weather patterns from over 120 countries and various use-case scenarios to ensure quality and compliance before being marketed. Walton refrigerators go through more than 70 different tests before reaching the market. NUSDAT is an independent testing lab globally certified for quality and compliance testing. Based on the lab’s reports, Walton can secure various global certifications, such as CE Certification for the European Union, FCC Certification for the USA, GS Mark Certification for the German market, and UL Certification for Northern American markets, as well as G-mark Certification for Middle Eastern countries. Walton’s products comply with these international standards, and more than 600 engineers are currently working in Walton’s Research & Innovation team, making it one of the largest teams in South Asia.
In addition to being the dominant local player in Bangladesh’s market, Walton’s focus on research and innovation, achieving compressor manufacturing capability, complete local manufacturing, strategic acquisitions, and securing international accreditation have played key roles in its international expansion.
Furthermore, Walton’s R&I team has focused on designing products tailored to the food habits, use-case scenarios, preferences, and weather conditions of Bangladeshi consumers. International brands usually design their products with global customers in mind, which means certain features may be unnecessary or even missing for Bangladeshi customers. As a local brand, Walton began selecting and designing product features based on the usage patterns and preferences of domestic customers, which received a positive response. Walton’s R&I team continues to play a crucial role in integrating advanced technology and new features into the company’s products. For example, Walton has already shifted its products to energy-efficient and environmentally friendly inverter technology. According to the company, Walton refrigerators with BSTI-approved 5-star ratings can save up to 75% of electricity.
Keeping up with the times, Walton has also added several smart features to its refrigerators, such as technologies for keeping food fresh, eliminating harmful bacteria, AI (Artificial Intelligence), and IoT (Internet of Things) features. To address the negative impact of global warming, Walton is working on phasing out R134 refrigerant gas in compressors and increasing the use of environmentally sustainable refrigerant gases. The eco-friendly R600a refrigerant not only helps protect the ozone layer but also plays a significant role in saving electricity. As part of this effort, Walton, the top player in Bangladesh’s refrigerator market, has phased out R134 refrigerant and replaced it with eco-friendly R600a refrigerant, a major achievement for Bangladesh’s electronics industry. For this achievement, Walton’s Chairman, SM Shamsul Alam, was awarded by the Government of Bangladesh.
Another important strategy that contributed to Walton becoming the top brand in the local market was its sales strategy. In addition to offering affordable pricing, Walton’s brand value and reliable product quality led consumers to prefer its products. To meet the rising demand from consumers, Walton expanded its business to suburban and rural areas through dealerships, in addition to its own showrooms. According to company sources, Walton has more than 20,000 showrooms across the country, bringing the brand’s products to even the most remote areas. The company also ensures that customers from all classes can avail Walton products. While urban customers can easily purchase products through EMI (Equated Monthly Installments) using credit cards, it is often impossible for rural customers to access EMI facilities. In response, Walton Plaza and its distributors offer easy installment facilities in suburban and rural areas, making Walton products even more accessible to customers. The company even forgives outstanding payments and provides financial assistance if a customer passes away before completing installment payments.
One of the key challenges for electronics brands is providing proper after-sales service to customers, especially in rural and suburban areas. Since international brands do not directly operate in Bangladesh, many customers who purchase these brands’ products struggle to avail of after-sales services. As a local brand, in addition to domestic production, Walton established ISO-certified service centers to provide after-sales service. Currently, the company operates more than 80 ISO-certified service centers nationwide to serve its customers. To further simplify the after-sales experience, Walton stores customer information, including name, address, mobile number, model, and barcode of the purchased product, on an online server. As a result, even if the warranty card is lost, customers can easily receive after-sales service from any service point.
In addition to being the top refrigerator brand in the Bangladeshi market, Walton also provides OEM support for both local and international brands. This means Walton manufactures refrigerators for many companies under their branding. Many companies also source compressors and other components from Walton. Furthermore, Walton exports refrigerators to more than 40 countries under its own brand. According to company sources, 80% of Walton’s total exports are made under the Walton brand, which indicates the strength of Walton’s branding and the capabilities of Bangladesh’s electronics industry. By exporting products under the Made in Bangladesh label, Walton is playing a crucial role in enhancing Bangladesh’s reputation in the global market.
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