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Published on April 22, 2008

Kwanchai Rungfapaisarn

The Nation

High inflation and the rising cost of living have led to a slowdown in growth for Thailand's electrical appliance industry in the first quarter.

However, the industry is vesting its hopes in June's European Football Championship, which is expected to boost the sales of audio-visual products, particularly LCD TVs.

Hidenori Matsui, president of Toshiba (Thailand), said the company's sales growth in the first quarter would only be 3 per cent, below its 5-per-cent target.

"Consumer spending is quite low. They have less confidence in the overall economy," said Matsui.

He said local inflation was high, and there was no sign of any reduction in petrol prices. Due to these negative factors, people are hesitating to spend, he said.

Matsui said Toshiba (Thailand), however, projected sales for fiscal 2008, which begins this month, to grow 5 per cent year on year.

"Many suppliers of electrical appliances are cutting prices as a strategy to boost sales. Prices of information-technology and audio-visual products dropped 10-15 per cent in the first quarter," said Matsui.

Jakkrit Keeratichokchaikun, director of Sony Thai, said the company achieved sales growth of about 5 per cent in the first quarter.

"Consumer spending was still inactive in the first quarter and all major suppliers need to launch marketing activities and promotional campaigns to boost sales," said Jakkrit.

"We, however, expect the coming Euro 2008 football tournament to help stimulate demand for LCD TVs in the second quarter, with sales expected to about double," he said.

Arnut Changtrakul, vice president of Thai Samsung Electronics, estimated overall electrical appliance sales would increase about 5 per cent in the first quarter.

Arnut, however, said sales of Samsung's audio-visual products had jumped dramatically by 40 per cent in the first quarter. The company's sales of electrical home appliances, such as air-conditioners and washing machines, also increased sharply by 25 per cent in the first quarter.

"Our dramatic sales growth has been driven by the launch of innovative products and attractive marketing and promotional campaigns at the right time," said Arnut.

The company is targeting sales this year to grow 30 per cent from last year.

"The Euro 2008 football tournament is expected to boost sales of audio-visual products, which are expected to increase more than 10 per cent in the second quarter from the first," said Arnut.

Suthisarn Chirathivat, president of PowerBuy, which operates retail stores for electrical appliances, said the value of the company's sales in the first quarter increased less than 5 per cent despite a 30-per-cent jump in sales volume.

"We've seen tough price competition among major suppliers in the market, which is responsible for the sales value lagging far behind the sales volume," he said.

Suthisarn said PowerBuy expected this year's sales to reach Bt12 billion, up from Bt10.5 billion last year.

The company will hold the PowerBuy Expo 2008 from Friday to May 5 at Central Plaza Lat Phrao.

The company expects the fair to generate sales of Bt400 million, higher than the Bt360 million achieved from the last year's PowerBuy Expo event.