Electronic goods sales declining says association

Electronic goods sales declining says association

Fitri Wulandari, The Jakarta Post, Jakarta

Sales of electronic goods declined by up to 26 percent during
the months of July and August, according to the industry
association.

Weakening consumer purchasing power is seen as the primary
reason for the decline in sales. This condition may be an
indication of slower than expected domestic consumption, which
has been reckoned as the main driver of this year's economic
growth, projected by the government at 4 percent.

"People prefer to use their money for other purposes such as
for their children's schooling, instead of buying electronic
goods," Lee Khang Hyun, chairman of the Electronics Industry
Association (Gabel) told The Jakarta Post on Friday.

"Many dealers of electronic goods have complained about
sagging sales during the past couple of months," he added.

Data from the Electronics Marketer Club (EMC) shows that TV
sales were down 20 percent in July to 202,000 units compared to
the previous month. Sales fell by 4.4 percent to 193,500 units in
August.

Refrigerators dropped 22.2 percent from 110,000 units in July
to 90,000 units in August. Washing machine sales plunged 16
percent from 29,000 to 25,000 units while air-conditioners took a
nose dive from 29,000 to 23,000 units in August or a 26 percent
drop from the previous month.

The declining trend in the sale of consumer products was not
only experienced by electronic goods. The Indonesian Association
of Cigarette Producers (Gapri) predicts that cigarette sales
would dip 20 percent from last year's 206 billion cigarettes.

EMC spokesperson Sung Khiun said that the fall in the sales of
electronic goods had forced many electronic companies to cut
prices in a bid to make more sales.

"They cut prices by between 3 percent to 5 percent a couple of
months ago," Sung told the Post.

Electronic companies have also cut production up to 20 percent
to avoid stock-piling.

Sung stressed that the condition was not seasonal as sales
last year had remained strong in each month.

Massive layoffs in many textile companies recently also
contributed to the lower sales of electronic goods, Lee said.

With these conditions, Sung said, many electronic companies
were pessimistic they could maintain last year's sales volume.

"If we could just reach last year's sales (volume) it is
already a good thing," he said.

According to EMC, TV sales are targeted at 2.7 million units.
Refrigerators are set at 1.5 million units and both washing
machines and air-conditioners at 400,000 units.

Sung added that companies hoped to boost their sales during
September and October before the Islamic fasting month of
Ramadhan which will fall in November.

"Sales will be down again in November as people prefer to
spend their money on food and clothes ahead of the holiday," Sung
added.

However, he said, the plunge in sales had made it difficult
for companies to reach this year's target.