The demand for cell phones and other electronic devices is falling. Ecommerce gains market share but fails to offset the general decline
The sale of technology and household appliances collapsed in Argentina, as a consequence of the COVID-19 pandemic.
According to different private surveys, sales they collapsed in Argentina from the beginning of the mandatory quarantine, showing a floor never seen before.
The mobile phone business is one of the most hit items. According to the consulting firm Carrier y Asociados, “without people on the streets and with shops closed, the drop in sales is between 70% and 75%.”
This happens “despite an increase in sales by online media that mitigated, very partially, the drop despite growth of the order of 50% for this channel,” according to Carrier.
“The outlook for the future is not encouraging, since once the isolation is passed (even partially), a very battered economy will remain with people with little money in their pockets. A 2020 that makes you want to be in December,” the report concluded. .
In the case of cell phones, according to AFARTE data, 2019 ended with just 7.2 million units produced, the worst record since 2010, when then-President Cristina Kirchner relaunched the Tierra del Fuego regime.
Last year’s record, by the way, was a long way from the “golden times”, as 2012 and 2013 were, when more than 13 million teams came out of the plants.
In the case of televisions, 2019 was directly disastrous for companies’ finances: just 1.8 million pieces of equipment were produced, when the average since 2011 had been 3 million.
All this led to the island concluding last year with an idle capacity of over 57%.
However, as they closed a year to oblivion, the companies nucleated in AFARTE hoped with a lukewarm rebound for this 2020.
“In December, before the word ‘coronavirus’ existed for us, we were projecting a year with an increasing trend, albeit a very moderate one. We were expecting an average growth of 5%, perhaps without so many solid foundations, but which were somewhat in line with the policy of promoting the national industry that was beginning to be seen and the extension of the Now 12 “plan, details Hellemeyer.
This is how they imagined reaching December with a cell phone manufacturing close to 8 million devices, about 800,000 above the 2019 record; while on televisions they expected to climb to 2 million units, 200,000 more devices.
However, with the plants stopped more than a month ago – in that province the quarantine started a week earlier – there is no place for any projection: “Production plans flew through the air, “said the president of AFARTE crudely.
According to a report by the consulting firm GfK, in week 12 of this 2020 fewer than 49,000 units were sold, compared to 285,900 in week 11.
“In general overview of all sectors and their respective categories was negative in units, as in sales value compared to the previous week,” they said.
Analysts also noted that brands were limited in distributions to stores that, for the most part, are closed.
Since the supermarkets and hypermarkets remained open to the public for the sale of food, they were able to sell some household appliances. In return, the premises specialized in household items were the most affected by having to lower their blinds at physical points, they explained.
Strong growth in online channel share
Despite this situation, companies in the sector were able to increase their sales in the online channel, although they were unable to take advantage of the true potential, given that the delivery service was partially limited, especially at the beginning of the quarantine.
“Last year, sales through the online channel weighed 10%, today they weigh 40%“they noted.
This occurred after the Government announced the authorization of sales for delivery of a list of “essential electronic products”, through the home appliance chains, which until then had been prohibited from this possibility. The list of products authorized by the Government included desktop computers, notebooks, cell phones, televisions (up to 55 inches), tablets, washing machines, refrigerators, freezers, printers, hot water tanks, water heaters, kitchens, ovens and microwaves.
Also small household and kitchen appliances, such as irons, vacuum cleaners, mixers, blenders, toasters and kettles, among others.
“The quarantine generated an increase in the time people spend browsing the Internet, and increased commercial operations within the online world. In this context, sales of technology and household appliances showed in Argentina, as in the rest of the world, a clear total contraction, but in the online channel it reported a much lower drop.
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