KARACHI: The sweltering summer has brought windfalls for electronic retailers as the spike in the demand for split air conditioners and room coolers enabled them to clear inventories and charge “on money or premium” on spot sales.
The scorching heat during Ramazan, coupled with prolonged power failures, has changed the dynamics of air conditioner and room cooler market as the demand has outstripped supply, pushing up sales of these items by over 200 per cent compared to last month.
Retailers believe that the fallout of heatwave on the elderly and children has alarmed many families. “Parents are desperate to ensure wellbeing of their children by installing air conditioner in at least one room of their house,” they added.
Some buyers were selective but most prefer the popular brand and settle for new one because of price differential.
Some well-known brands — especially Haier, Gree, Kenwood, etc — are in short supply, opening a window of opportunity for manufacturers of new brands whose sales have surged suddenly.
After failing to find the reputed brands or refusing to pay premium on spot sales of air conditioners, many consumers have started buying room coolers thus making them the most sought-after items.
Dealers are cashing in on the demand surge by charging around Rs5,000 more than the original price of Rs11,000.
A dealer of room cooler in F.B. Area said that he used to sell 40 to 50 units in three months of summer, but sold as many units over the past week.
He said the manufacturers of room coolers and split ACs can possibly not be prepared for such a sharp surge in demand. “You can’t expect them to double their production on a short notice.
“If I have 50 to 100 air conditioners in my shop, the demand is at least five times more. I have buyers ready to get the cooling machines at any cost,” he said.
Another shopkeeper said, “The rush of buyers for air conditioners indicates that people have somehow managed ready cash to get what they want and willing to pay extra over and above the original price.”
Karachi Electronics and Small Traders Association President Mohammad Rizwan agreed that retailers in different areas are charging an extra Rs2,000 to Rs5,000 per split AC depending on the weight.
He said many dealers of room coolers after running out of stocks have closed their shops. People have paid Rs16,000 for a room cooler against the original price of Rs11,000.
Rizwan said the demand of split AC has more than doubled now. “A shop used to sell 10-15 items daily in normal days are now selling 25-30 units despite huge supply constraint from the manufacturers.
“Cash-rich people are buying air conditioners while low-income groups room coolers,” he said, adding that room coolers had never been popular in Karachi as compared to Punjab. “I have never seen such unprecedented demand in my life for both items.”
He believed that the demand for split AC would only fall in case the city receives heavy showers and weather turns pleasant.
The data for large-scale manufacturing (LSM) reveals a five per cent increase in production of air conditioners during April 2015 to 41,265 units compared to 39,348 in April 2014.
Production, however, fell by 12 per cent in July-April 2014-15 to 195,656 units from 222,974 in the same period of last fiscal year.
Published in Dawn, June 23rd, 2015
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