Industry Analysis of Electronics Market in Bangladesh

Submitted By: Md. Sakib Faisal

Designation: Management Trainee Officer (MTO)
Employee ID: 7601

Date of Submission

11/6/2022
 Industry Analysis of Electronics Market in Bangladesh

In the 1950’s, the electronic consumer appliance journey started with assembling the radio set. The
electronic appliance sector was almost predominately import oriented until the early 1980’s, later,
several assembly plants were established in Bangladesh. Walton and MyOne started their operations in
the 1990’s as the first commercial consumer electronic makers.

Current market size: USD 2.4 Billion. (UCB Asset Management)

Growth in Last Decade: As per UCB Asset Management Limited information, the average annual growth
of electronics market was 14% in last decade.

Expected Growth in this decade: As per UCB Asset Management Limited information, the average
annual growth of electronic market will be 17% in ongoing decade. Overall electronics and electrical
equipment market are expected to surpass USD 12 Billion by 2025 with consumer electronics market
expected to cross USD 10 Billion by 2030.

Local Key Players: Walton, Rangs, Butterfly, Nova, Jamuna Electronics, Singer, Electra, ECO+

Foreign Key Players: Sony, Samsung, Panasonic, Toshiba, Philips, LG

Major Export Destinations: India, Maldives, Nepal, Middle East, Africa, UAE, Germany, Romania,
Greece, Mexico, Hong Kong, Kuwait, Australia, Japan, Singapore.

Major Selling Items of Electronic Industry: As per information from Market Watch Bangladesh (MWB),
the market share of TV is 30.03%, the market share of Refrigerator is 40% in electronic industry of
Bangladesh. AC also one of the most selling electronic items in Bangladesh. As most of the market share
is acquired by this three items, so we will focus on the details about these items in below:

Television: The current estimated market size is $687 million. Bangladeshi Companies control 40% of
the television market while imported or assembled foreign brands hold over 60 per cent, according to a
recent study by Marketing Watch Bangladesh (MWB).

Brand Name Walton Minister Vision Singer Jamuna Samsung Sony LG

Market Share 25-27% 4% 3% 9% 2% 12.5% 6% 5%
Table: Market share of companies selling TV in Bangladesh

Refrigerator: The current estimated market size is $779 million. Bangladeshi companies control 77% of
the refrigerator market according to a recent study by MWB.

Brand Name Walton Marcel Singer Jamuna LG Samsung Others Butterfly

Market Share 66% 5.7% 1.15% 2.99% 1.37% 1.15% 13.37% 3.14%
Table: Market share of companies selling Refrigerator in Bangladesh

Air Condition: The AC market size of Bangladesh is $588 million. Foreign companies control 80% of the
AC market in Bangladesh and local companies have only 20% of market share. Out of this 20% market
share among local companies, Walton have majority of the market (30%) followed by Vision (10%).
 Brand Name Midea General Gree Chigo
Market Share 43% 18% 15% 14%
Table: Market share of foreign companies selling AC in Bangladesh

Export Earnings from the top three exported electronic items for FY 2020-21:

Products Earnings (In Millions)

Refrigerator $10.63
Television $6.42
Air Conditioner $2.27

SWOT Analysis
Strengths:

 As per World Bank data, in the year 2010 only 60% of the total population was under electricity
coverage but now 100% of the total population is under electricity coverage.
 Bangladesh government have established three high tech parks in Kaliakor, Rajshahi, & Syhlet
and many economic zone throughout the country. So, now foreign and local companies can set
up factories within the country to manufacture electronic products and supply it all over the
world. For example: Singer have set up a washing machine manufacturing plant in the year
2021.
 We are creating our own backward linkage industry. As a result the cost of LCD panel of TV
reduced from BDT18000 to BDT2000, AC compressor cost reduced to BDT15000 from
BDT30000, and refrigerator cost reduced to only BDT 4000.
 Foreign brands are now in partnership with local brands to add local value to their products
because local companies able to create their own brand value. For example: LG through its
Bangladeshi local partner Butterfly, has invested $100 million to establish LED TV, refrigerator
and air conditioner manufacturing plant in Bhaluka, Mymensingh. Fair Electronics, local partner
of South Korean electronics giant Samsung, has invested BDT 10 Billion in building a plant to
achieve the goal of manufacturing 300,000 Samsung Smart Television each year.
 The import dependency is decreasing every year at a constant rate.

Number of units in Millions

Products 2019-20 2018-19
Televisions 3.02 3.02
Air Conditioners 19.89 14.45
Refrigerator 13.43 21.06
Table: Import of Consumer Electronics Products

Weaknesses:

 Unable to capture high income group by local companies.

 Low quality hard ware by local companies.
 Lack of after sales service or customer service.
 Lack of skilled man power.
  Lack of Backward linkage industry.
 Poor logistics and transportation facilities.

Threats:

 World economists predicting an economic recession for the year 2023. Our prime minister also
predicting a famine in the year 2023. It might negatively affect the consumption of luxurious
products.
 Threats for local companies due to entrants of foreign companies in Bangladeshi market.
 New entrants threat for local companies in European and American market.
 Recently India has banned import of Refrigerator, AC and TV. In the Fiscal Year 2020-21, we have
exported worth of $3 million in Indian market.
 There might be political instability in the year 2023 because of the election.
 The grey market products holding estimated market share of 20%- consist of counterfeit
(sticker-based) Chinese products and brands coming through unauthorized channels.

Opportunities:

 China is the highest exporter of electronic products in the world. China is moving to high-tech
and heavy industry. As a result, China is no longer able to benefit from low-cost labor due to the
increase in skill labor. Many foreign electronic companies especially the medium and low-tech
industries are moving to low cost labor countries like Bangladesh.
 Increase of per capital income and affluent people. According to WB data, Per capita income in
2010 is only $800 but in 2021 per capital income is $2227. As per UCB asset management,
middle and affluent class of population would grow to 3.4 crore in 2025 and at the end of the
decade the number would be at least 4.5 crore.
 Growth in urban population. According to UCB asset management data. Every year 3% to 4%
people came to urban area from village areas. Urban population has grown immensely from
30.50% in 2010 to 38.20% in 2020.
 With the increase of nuclear families and female employees, the demand for electronic product
is increasing day by day. As per data from MWB, Female labor force participation has increase to
38.7% now from 30% a decade ago while the South Asian average is still 23.6%
 Bangladeshi government want to promote “Made in Bangladesh” products. They are
encouraging foreign investors for FDI. Government providing facilities such as tax exemption,
export incentives, reduction of import duties to encourage manufacture electronic products in
Bangladesh.
 Expecting an increase of sales in TV market due to the T-20 world cup and football world cup-
2022.