December swoom for TV, fridge salesmen

The Jakarta Post, Jakarta

While holiday festivities draw nigh, electronic products manufacturers are not so cheerful as sales growth this year is expected to be slower than initially projected.

Lee Khang Hyun, chairman of the Association of Electronic Industry (Gabel), said that sales in 2002 were estimated to grow by only 10 percent compared to the previous projection of 25 percent.

"This year's holiday season is not too good. Normally, sales pick up in the second semester but it's slightly lower now than last year's," Lee told The Jakarta Post on Tuesday.

He said that people now preferred to save their money to finance their longer vacation period.

The government has recently extended the holiday period for the Muslim Idul Fitri celebration to three days from the traditionally two-day period, and to two days for Christmas.

According to him, sales of televisions and refrigerators in the past had always been good in the run up to the Idul Fitri or Christmas celebrations.

"But during this holiday, refrigerator and TV sales are not too good," Lee remarked.

He speculated that the weaker sales performance could be attributed to the Oct. 12 Bali bombing incident which had hurt consumers sentiment and weakened the exchange rate of the rupiah against the U.S. dollar.

Since the production of electronic goods are heavily dependent on imported raw materials, a favorable exchange rate is crucial to make the goods more affordable to the people.

"People haven't recovered from the event. They're still waiting to see what transpires with the exchange rate to get a better price," Lee said.

The declining trend in the sales of electronic goods has actually been felt since the middle of this year. Sales of TVs were down 20 percent in July to 220,000 units compared to the previous month, while the sales of refrigerators dropped by more than 22 percent to 110,000 units.

Massive layoffs in many textile companies in the beginning of the year had also contributed to the sluggish sales performance.

Many manufacturers initially hoped that the year-end festivities would help boost sales in the second semester, projecting TV sales to reach 2.7 million units, while sales of refrigerators would reach 1.5 million.