The market size of Bangladesh’s consumer electronics sector is $2.28 billion, which is expected to reach $10 billion by 2030. This growing sector of Bangladesh has already become self-sufficient. Bangladesh’s brands are now the market leader in most of the product categories in the consumer electronics sector of Bangladesh, which was once 100 percent import-dependent. Walton, a Bangladeshi brand, leads the market in almost every category. In this context, to meet the local market’s demand and after seeing the success of the Bangladeshi brands, several international brands have also started manufacturing locally. However, the dominance of Bangladeshi brands is highest in every sector of the major product category of this sector. But, how have Bangladeshi brands brought such a change in the country’s consumer electronics sector?
Compared to the previous year, the per capita income of Bangladeshis has climbed to $2,824 at present. Also, because Bangladesh is becoming more and more urbanized, people’s buying habits and how they spend their money have changed a lot. According to a report in The Daily Star, all of Bangladesh’s people will have access to electricity in 2022, whereas only 47 percent did in 2009. Once upon a time, Bangladesh’s consumer electronics industry was nearly reliant on imports, and now it’s one of the fastest-growing industries in recent years. In the 1980s, Bangladesh started building assembly plants to make small electronics like radio, TV, audio, and video cassette players. This made the country less reliant on importing electronics. Walton’s journey in the Bangladeshi electronics market began in 1997.
Later, MyOne and a few other companies started doing business in Bangladesh. At that time, these domestic companies started putting together products in the country by importing all kinds of electronic parts and components. But as the market for electronic appliances grows, these companies slowly switch from assembling to making. They import a few technical parts, but the rest of the parts are being made locally. With the opening of Walton Hi-Tech Industries LTD in 2007, Walton started making refrigerators, freezers, and air conditioners in its own factory. When Bangladeshi brands like Walton Electronics and home appliances began to be priced similarly to international brands, more people started to buy them. Because of Walton’s success, other local brands have started making more home appliances. As a result, local brands tend to have more competitive prices than foreign brands. Several international brands have started making their products in Bangladesh in partnership with Bangladeshi companies. They do this so that their prices can be more competitive with those of local brands. In 2017, the South Korean tech company Samsung set up two factories in Bangladesh with the help of Transcom Group and Fair Electronics. In 2018, another South Korean giant, LG, set up a manufacturing plant with a local partner, Butterfly. In May 2021, Singer set up its washing machine manufacturing plant.
How Does It Changing?
One by one, brands like MyOne, Vision, and Marcel joined Walton as assemblers in the electronics market of Bangladesh. From the start, Bangladeshi brands were very aware of how much their products cost. In 2002, the per capita income of a person living in Bangladesh was only $413. Because of this, most people in the country at the time could not afford to buy major electronics like TVs, refrigerators, air conditioners, or washing machines at higher prices. Because of this, local companies started to offer products at lower prices than international brands by assembling them locally. Afterward, when companies started making their products locally, it was easy for them to lower their costs even more. However, while assembling a product, most of its parts and pieces had to be brought in from other countries, which was a very expensive process. So, even if they wanted to, brands couldn’t lower the prices of their products. When all of these brands start making all products in the country, the costs of making them will go down significantly. As a result, brands continue to sell their products at reasonable prices to local customers. Because the prices of local brands were so low, the prices of international brands that were selling their products in Bangladesh at the time had to go down as well. So, it’s a win-win situation for the country’s consumers as well.
In later years, local brands started to improve the quality of their products and make them more affordable. As a result, the domestic market for electronics has become more competitive. Customers have always liked foreign brands because of their brand value and reliable quality, but they are leaning more and more toward local brands because they offer affordable quality products. And local brands are using dealerships to grow their businesses in rural and semi-rural areas of the country to meet the growing demand for consumer electronics.
Urban customers can use credit cards to get EMI perks, but it’s nearly hard for rural customers to do the same. ‘Area-based dealers may often sell products in monthly or easy installments, which is not viable for worldwide brands because of their familiarity with the local population. For example, Walton is one of the Bangladeshi brands that has about 20,000 sales outlets all over the country. This means that people in even the most remote parts of the country can buy its products.
Also, this industry’s biggest challenge is ensuring customers get good service after the sale. And this problem is more common in rural and suburban areas, as well as with international brands. Since they started making products in the country, local brands have put a lot of thought into customer service after the sale. Because of this, customers can now get service after the sale in departmental and district cities. Consequently, the propensity of customers to purchase products from domestic brands has also increased. Currently, Walton has 77 service points all over the country. It has also started storing the customer’s name, address, mobile phone number, product model, and barcode on an online server to make after-sales service easier for the customer. So, even if customers lose their warranty card, they can easily get service at the service point.
Typically, international brands build their products with global consumers’ preferences in mind. So, these products have numerous useless or unwanted features for Bangladeshi buyers. On the other hand, local brands choose and design their products’ features based on how local customers use them and what they like. Because of this, features made by local brands are more useful to customers, and customers also prefer to buy products from these local brands.
Due to this, local brands are currently leading the market in most of the major home appliances or consumer electronics as well as small electronics categories. Walton has been the best local brand in almost every category. For example, the electronics giant Walton is responsible for 75 percent of all refrigerators sold in the country. Also, Marketing Watch Bangladesh says that local manufacturers meet 52 percent of the demand for TVs in Bangladesh, with Walton at the top of the list with a market share of more than 25 percent. Besides Walton, Singer has 9 percent of the television market, Minister has 4 percent, Vision has 3 percent, and Jamuna has 2 percent. Not only that, but 65 percent of the country’s AC demand is met by local manufacturers, along with TVs and refrigerators.
Along with the market for major home appliances, the need for small home appliances in Bangladesh is enormous and expanding rapidly. Even in this category, a lot of the local demand in Bangladesh is met by local brands. From this, it’s easy to see that Bangladeshi electronics manufacturers are now able to complete a large portion of the country’s demand for consumer electronics.
At present, these local brands are exporting their products globally after meeting the local demand. For example, Walton is currently exporting its products to 40 countries worldwide and plans to export to a total of 125 countries by 2025. As a result, a total of $6.23 million worth of AC and machinery have been exported from Bangladesh in FY 2020-21. In addition, according to an EPB source, in the same financial year, the volume of refrigerator and equipment exports from Bangladesh exceeded $12 (12.283) million.
Also, popular international brands are also doing business in the Bangladeshi market by operating their own manufacturing units. Therefore, in the near future, Bangladesh has a special potential to become a manufacturing hub for global consumer electronics. If so, Bangladesh’s reputation in the global market will further increase as well as enrich the country’s economy.
Considering all factors above, it is easy to understand that the local manufacturers in Bangladesh have already changed the consumer electronics sector of the country. Not only that, but it has made a significant contribution to turning the country into an almost self-sufficient consumer electronics market.