In the second week of January, the cost of televisions, refrigerators and other household appliances may increase by as much as 10 percent due to the increase in the cost of raw materials such as copper, aluminum and steel and the increase in ocean and air freight charges. Sellers in India rely on supplies from overseas markets, especially China, when it comes to appliances. As a consequence, almost all the big brands have either agreed to raise the price or are thinking about it.
Prices have not increased at present, but the indications from the brands are that in the second week of January they will grow by 7-10 percent. This will be through brands and relates to categorize one of India’s largest offline retailers, such as televisions, refrigerators, washing machines. Nilesh Gupta, Director, Vijay Sales confirmed that prices are going to increase, TCL also said that the percentage would depend on the period of supply.
“We are currently evaluating the situation, but yes, as per the industry norm, there will definitely be some percentage adjustment, but as of now, we will not be able to give out the percentage as it depends on the supply cycle,” commented Vijay Kumar Mikkilineni, Senior Marketing Officer, TCL India.
LG Electronics India also reported to PTI earlier this week that it will raise the price of its goods in the appliance segment by a minimum of 7 to 8 per cent from January 1 next year.
From January, on all products, including TV, washing machine, refrigerator, etc, we will raise the price from 7 to 8 percent. Prices for raw materials and metals such as copper and aluminum are growing. In addition, crude oil prices have risen, so the cost of plastic materials has also risen significantly, said Vijay Babu, VP of LG Electronics India Home Appliances.
Why the latest hike in prices?
It is suspected that the main factor behind this price rise is the increase in the cost of raw materials such as copper, aluminum and steel. The price of plastic has also risen due to rising crude oil prices. The challenge for television manufacturers is to find panels at the correct price. The cost of the panel, especially for the small screen sizes, has risen.
Finally, with new freight charges and legislation coming into effect, shipping prices are expected to increase sharply in January. For those who are unaware, the process of shipping goods by sea is ocean freight. To replace the current Merchant Shipping Act, the government has drafted a new Merchant Shipping Bill. Regulating shipping freight is one of the main aspects of the new bill. The lack of containers is the other reason for the rise in costs.
Kamal Nandi, President, Consumer Electronics and Appliances Manufacturers Association, puts upward pressure on the overall input costs of appliances due to a rise in the cost of goods by 20 to 25 percent, an increase in ocean and air flights to the extent of 5-6 times due to the scarcity of containers, and the lag in mining activity due to the pandemic.
However, there are others, including Sony, who are still in waiting mode and expect things to change in the first half of next year. With the changing dynamics of supply it is a wait and watch situation. We have witnessed a large rise in television demand at this time, but supplies have been decreased due to the unavoidable factors and other international issues.
Now that the situation is improving, we expect things to become more stable by next year’s first half. It will be important to see if the price rise remains a permanent step or whether the industry is able to bounce back with the pent-up demand.