Bangladesh AC market heats up on heatwave

[Bilal9]

• 40.5 Degrees Celsius: Dhaka breaks another temperature record
• Severe heat wave likely to continue with little change

The sales of air conditioners (AC) rose sharply in recent weeks as people desperately seek respite from the scorching heat amid a severe heatwave that continues to batter most of Bangladesh including the capital.

Dhaka on Sunday recorded its highest temperature in 58 years with the mercury soaring to 40.5 degrees Celsius. The hot weather is likely to continue in the next 72 hours, according to the Bangladesh Meteorological Department.

Meanwhile, the demand for AC has jumped in the last few days, with importers, manufacturers and sales centres in the capital reporting about four times higher than usual sales and two-three times higher sales than in April last year.

Tanvir Rahman Sajib, chief executive officer at Walton Air-Conditioner, told The Business Standard (TBS), "Compared to April last year, we witnessed more than 100% growth this April, and more than 400% growth compared to normal time."

"In normal times, we sell close to 1,000 units of AC per day but now we are selling 3,500-4,000 units. Due to good quality and relatively low prices, Walton's ACs are selling in higher numbers in rural areas. We are also getting huge responses from corporate houses."

Electromart, the marketer of the country's highest-selling Gree AC, is also witnessing a boost in sales compared to last year.

"The demand for Gree AC can be seen around the year but it skyrocketed over the last week with sales doubling in Dhaka and Chattogram cities," Md Nurul Afsar, the deputy managing director of Electromart, told TBS.

"The demand for new technology inverter AC is high. The inverter AC uses variable-speed compressor motor technology and, unlike the start/stop operation of a fixed-speed air conditioner, they are able to adjust the compressor speed in tune with temperature fluctuations. Due to this, electricity consumption is reduced, which is environmentally friendly," Nurul Amin added.

Amjad Hossain, a resident of Dhaka's Malibagh, installed a one-tonne AC in the bedroom of his three-room rented flat some two years ago. On Sunday, he was forced to buy another 1.5-tonne AC from the General Electronics showroom in Moghbazar for his living room.

Amjad Hossain told TBS, "I am a fixed-income private employee and it would be very difficult for me to run two ACs, considering the high electricity prices. But the heat is unbearable. I bought the new AC with my credit card for Tk1 lakh on an equated monthly instalment (EMI) scheme. I will pay off the debt slowly."

Esquire Electronics Ltd, the largest vendor of foreign brands in the country, thinks that climate change and affordable prices are crucial factors in the sales boom.

Esquire distributes several international brands such as General Air Conditioner of General Electronics and Japan's Sharp and Dutch brand Philips.

Manzurul Karim, chief marketing officer of Esquire Electronics, told TBS, "We feared a heatwave this time around and have taken preparation accordingly. Sales in the second week of April were almost four times the normal period and double the same period last year."

Among the companies that market ACs in the country, Samsung, MyOne, Unitech, Transcom Digital, Vision, Jamuna and Butterfly have reported a growth of 50-100% in sales.

Imran Hossain, the sales staff of the Transcom outlet in Karwan Bazar, said, "AC sales are going through the roof right now. Normally, I go to buyers' homes to set up the machines but nowadays I have to stay at the outlet to deal with customer pressure."

AC prices see a 15% to 20% rise in a year

Nowshad Hossain works in the marketing department of ACI Group with a monthly salary of Tk50,000. He has three family members including a one-year-old child. Recently, he bought a locally manufactured AC at Tk46,000.

"With the unbearable temperature in Dhaka, I dared to buy an AC with the EMI facility. But the price has increased too much compared to last year. Nevertheless, I am just happy that I am able to provide relief to my child this summer," he said.

Analysing the market, TBS found that AC prices of almost all companies have increased by 15-20% in a year.

A Chinese AC sold at Tk35,000-40,000 a year ago now costs Tk42,000-48,000. The price of a 1.5-tonne (local or Chinese) AC is now Tk70,000-75,000, which was Tk60,000-65,000 a year ago. The price of the same-sized AC of foreign big brands has gone up to Tk1.3 lakh from Tk90,000-1,00,000.

Mesbah Uddin Ahmed, chief marketing officer at Fair Group which is the manufacturer of the Samsung Brand AC in Bangladesh, said, "Due to the dollar crisis and the shortage of raw materials in the global market, the cost of producers has increased by 40%. Therefore, companies had no choice but to increase prices."