KARACHI, Feb 22: A price cut of Rs2,000 to Rs3,000 on a refrigerator and deep freezer has failed to attract as many buyers this Eid-ul-Azha and shopkeepers at the main electronic market on Abdullah Haroon Road look disappointed.

The manufacturers have offered an attractive ‘Eid Package’ for the customers with a cut on prices and payment in instalments on purchase of refrigerators and deep freezers. But apparently response is less than expected.

Every year, the advent of Eid-ul-Azha mark the beginning of a roaring business session for these shopkeepers who work over-time to tackle the rush of customers till past midnight. But not this year. The rising poverty has taken its toll.

“A massive erosion in purchasing capacity, rising cost of utility bills and price hike in essential items are keeping the buyers away,” president Karachi Electronic Dealers Association (KEDA), Mohammad Irfan told Dawn on Thursday.

“Sales have plummeted by at least 50 per cent this year,” he said adding that the rush should have been started at least 10 days prior to Eid but this year, the situation is totally different.

He recalled that shopkeepers used to open their outlets late nights doing booming sales. Now they usually pull down their shutters after 9.30 p.m. in absence of buyers.

One of the leading producers of domestic appliances also shared the same views, saying sales have not been up to the mark despite price cuts. “Usually our sales shoot up by at least 20-25 per cent ahead of Eid-ul-Azha but these days, sales are passing in a laggard way, he added.

In previous years, Eid-ul-Azha has always proved a boon for the domestic appliance producers to cover up losses of lean sales period. People usually purchase these items on festive occasion coupled with some buying from people who include refrigerator in the list of dowry of their daughters. Assemblers’ price cut schemes also lure buyers who try to gain some timely benefits instead of buying in peak season when prices are high. People usually buy deep freezers for storage of meat in Eid-ul-Azha and refrigerators for dowry purpose.

Industry people have now pinned their hopes on increase in sales in upcoming peak season, starting from March 15 to June, but liquidity crunch may come as a genuine hurdle for the buyers to rely on old appliances in their houses.

Currently there are four active players in the market — Dawlance, PEL, Waves and Singer — while Philips has packed up its business last year. Three years back, there were 11 assemblers and the production ranged between 40,000 to 50,000 units per annum.

Four manufacturers roll out 250,000 units of fridge every year out of annual estimated demand of 300,000 units, while the rest find way into the markets through legal imports.

In deep-freezers, local manufacturers virtually rule the markets by producing 125,000 units equal to the actual annual demand. Dawlance enjoys major market share in fridge, while Waves has the monopoly in deep freezers.

The industry has achieved the indigenization level of 84 per cent in refrigerators and 81 per cent in deep freezers. The market share of local producers currently stand at 83 per cent as compared to 33 per cent 13 years back.

The industry, which enjoyed boom period during 1992-1995, plunged into hot waters from 1996 due to increase in sales tax to 18 per cent from 15 per cent and levy of excise duty, thus crippling their sales followed by liquidation of a number of companies.

They suspended their operation due to heavy taxation and falling demand. Tariff protection on imported components in 1999 by the government pulled the local assemblers out of the red. So far only four serious players have managed to sustain in the markets and are fully catering to the annual requirements by winning the confidence of local consumers.