Technical Consumer Goods Industry in Thailand Affected by Flooding Situation: GfK Thailand

October sales across all major product groups

The flooding situation that has hit Thailand in recent months has started showing an adverse effect on the overall technical consumer goods industry. As flood waters progressively travelled from the northern region southwards and inundated Central Thailand by October, increasing number of industrial estates and consumers became severely affected, causing direct impact on industrial production and consumer spending habits.

According to GfK Thailand’s October retail audit figures, a general downward trend has been reflected across all product categories. Retail sales have either declined from the previous month, or in cases where growth were registered, results were weak and paled considerably from market performance during this same period a year ago.

“The flood has definitely affected the technical consumer goods industry in several ways,” said Dr. Wichit Purepong, General Manager of GfK Thailand.

“For one, residents facing the crisis would have probably lost any mood to shop, especially when it comes to big ticket items. On top of this, traveling and transportation at places where the situation is more extreme has become a huge challenge and deterrence for consumers.”

For instance, sales of bulky products such as washing machines, television sets, desktop computers, and printers fell in the month of October. However, it was the air-conditioner segment that bore the greatest brunt, reporting a substantial 36 percent decrease in volume over September.

“When we look at the performance of the air-conditioner segment last year during this same period, sales had remained stable and this have shown to us that the current situation have impacted the market considerably,” noted Dr. Wichit.

Another factor that has also contributed to the lackluster performance of the industry is the bearing of the flood on industrial output since the beginning of October when the flood waters hit upper central Thailand. The seven key industrial estates there housing several hundred factories had to be shut down and productions were badly affected.

“Besides a dearth in output due to production suspension, there were also logistical issues faced by manufacturers that prevented their products from being delivered to the dealers’ shops, hence resulting in product shortage,” highlighted Dr. Purepong. “Moving forward, when the flood is finally over, we can expect to see the industry rebound again with increased consumer spending,” Dr. Purepong added. “Besides the sales surge as a result of seasonal festive buying that we anticipate every year-end, we can also be expecting increased consumer spending to replace appliances and gadgets that were spoilt during the disaster. For the manufacturers, that is the light at the end of the tunnel!” Dr. Purepong concluded.