Pile-up at Shanghai port to affect supply of home appliances in India

If you are planning to bring home an air conditioner, refrigerator or a washing machine in a week’s time or two, chances are, your nearest retailer may not have the full inventory to let you choose from.
And it’s not a sulking salesman you are dealing with. You are out for shopping at a time when consumer durable companies in India are struggling with diminishing inventories.      
 
And that’s because consumer durables companies in India – which depends heavily on components from China – have been affected by the pile-up of cargo ships near Shanghai port.  
Employees of the Chinese port are reportedly unable to go to work because of strict Covid-induced lockdown in the region.

Demand for summer products, like refrigerators and air conditioners, has been improving during the past few months, recovering from the pandemic setbacks.
But supply side constraints and soaring inflation drove input costs at lifetime highs, making consumers brace for price hikes. This was followed by Covid-induced curbs in China – all of which are now impacting the production of consumer and electronic products.
 
“June could be bad if the lockdown continues in China. It is difficult to predict the impact right now” - Eric Braganza, President, CEAMA
 
For Eric Braganza of the Consumer Electronics and Appliances Manufacturers Association, it is difficult to predict the extent of the impact the lockdown in China would have on consumer durables companies right now. Speaking to Business Standard, he said a few models could go out of stock due to delays in components coming from China, he says.

Contract manufacturer Dixon Technologies also reports shortage in components supply during the past three weeks, as shipments delayed are already in the pipeline.
However, Super Plastronics, the brand licensee of Kodak, Thomson, Blaupunkt and Westinghouse in India is in a better position. The company had stocked up in October-December and January-March anticipating some disruption, says Avneet Singh Marwah, chief executive of Super Plastronics.  
 
Talking to Business Standard, Prabhu Ram, Head - Industry Intelligence Group, CyberMedia Research (CMR), there is relatively high demand for consumer durables and companies had stocked up on inventories. However, lockdowns in China have still hit supply of components and consumers will face price rise across the board if situation is not reversed in the next month or so, he says. 

Consumer product companies dealing in refrigerator and air-conditioner estimate supplies will be lower than demand from May onwards, owing to the heatwave and pent-up demand. The shortage in supply of consumer electronic components from China will only widen this demand and supply gap in the coming months.