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.