Economy slowly coming out of coma
Businesspeople attributed the growth to people venturing out to complete their suspended spending decisions
Even amid ongoing debates over economic-recovery strategies, some businesses see a surge in demand for quite a few products.
Sales of mobile phone, computer, laptop, TV, refrigerator, construction ms rod, cement, and motorcycle saw a rise in demand in June.
Economic activities resumed on May 31 after a 66-day nationwide shutdown.
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Businesspeople attributed the growth in these sectors to people venturing out to complete their suspended spending decisions during the shutdown period. New realities have also created demands for new products contributing to the surge, they think.
The market for daily essentials such as fish, meat, oil, pulses, imported spices is also slowly recovering from a moribund state. Sales of daily commodities grew by at least 20 percent in June compared to April-May.
However, traders claim that sales of furniture, clothing and jewellery are yet to come back to comfortable figures. They report about 25-30 percent sales of pre-pandemic times.
On the other hand, lost customers of restaurants and footpath shops have not come back yet in full force because of requiring to stay within health safety guidelines.
Good times for mobile phones and computer accessories
An increasing number of people are using online shopping to stay safe at this time of the pandemic. The use of the Internet has become critical with offices and educational institutions opting for meetings and classes online, giving a boost to mobile phone, computer and laptop businesses.
Sales of computers and laptops have grown by about 50 percent at the retail level and mobile phones sales are up by 25 percent in June over the same period last year.
Shahid Ul Munir, president at Bangladesh Computer Samity, said retail sales of computers, laptops, speakers, headphones and other accessories in June were higher than at any time before. However, sales of desktop computers for offices and for various projects are almost nil.
Mohammad Mesbah Uddin, chief marketing officer at Fair Electronics, the manufacturer and importer of Samsung smartphones in Bangladesh, said overall, about eight lakh units of mobile phones were sold in June, up 25 percent over the same period last year.
Sales of air conditioners, washing machines, refrigerators are up
Some consumers are re-decorating corners of their rooms for an office feel amid a work-from-home requirement during the pandemic. One home appliance they are splurging on is the air conditioner.
According to a top company, sales of air conditioners in June increased by at least 10 percent compared to the sale figure of June last year. Television sales also grew at the same rate.
With Eid-ul-Adha approaching, refrigerator sales see an uptick as well but the most sought after appliance is the washing machine. Its sale registered the highest 50 percent growth as house helps are still not allowed in most residences for infection fears.
Uday Hakim, executive director of Walton, an electronic product giant in the country, told The Business Standard that the sales season for electronics products is between March and July. As there was no sale in April and May, the buyers are spending in June. Sales have also benefited from the upcoming Eid-ul-Adha.
However, overall there will be negative growth at the end of the year, he added.
Uday Hakim also thinks that the demand for all kinds of home appliances has seen a strong trend as people have been working from home.
An official from another top company said the sales in this sector have not decreased as almost all the electronics companies have started selling products online.
Construction steel rod, cement see growth after three months
Construction material businesses have overcome a miserable phase with positive growth.
According to data, sales of cement and construction steel rod increased by 11 percent and 9 percent respectively in June over the same period last year.
Industry insiders say different projects suspended in April and May have restarted. The demand for raw materials is also showing an upward trend in the market.
"Orders of April and May have been added to June orders," Masud Khan, an adviser to Crown Cement, told The Business Standard. However, sales were lower than the figure in June last year.
As a result, the sector registered an 11 percent growth in June compared to that in the previous year. However, the sector is still in negative growth of 10 percent according to the last six months' estimate, he added.
Ali Hosein Akbar Ali, managing director of BSRM, a large steel mill in the country, said sales rose in June, but not at the same rate as normal times.
Motorcycle sales speed up
Sales of motorcycles fell by 96 percent in April. In June, sales increased by 12 percent over the same period last year. There are two reasons for growth – one is, people are preferring to use motorbikes for maintaining social distancing, and the other reason is, those who had plans for getting bikes already are completing their purchases now.
Hafizur Rahman, managing director of Runner Automobiles Ltd, said sales went up in June as the rural economy remained active and people completed their purchases that got suspended owing to the pandemic.
Market for daily essentials recovering slowly
After the shutdown was enforced, all sectors came to a standstill but the market for daily essentials and consumer products was still active.
However, sales of these products have decreased by 30-35 percent because of the suspension of social events. April was a dull period. Although there has been some improvement since May, the market has not yet returned to its previous sales performance.
Despite some improvement, sales are still 20-25 percent lower than usual, said Rafiqul Islam at Chandpur Store in the capital's Karwan Bazar, the country's largest consumer market.
He said, "All hotels and restaurants are not open yet. Some have shortened business hours and there are no social events including weddings, so sales are less than usual. Earlier, daily sales were around Tk10-11 lakh, but now it is not more than Tk7-8 lakh."
Kamruzzaman Kamal, director (marketing) of Pran-RFL Group, the country's largest consumer goods conglomerate, said, "Sales of products in the local market are on the rise compared to those in April and May. We are witnessing positive growth."
Jewellery, clothing and furniture businesses in disarray
All the big shopping malls in the country are now open, showrooms of furniture and jewellery are sporting colourful looks. However, customer traffic is thin at these businesses. Although they reopened in June after two months of the shutdown, their business is down by 70-75 percent than usual.
Shaheen Ahmed, president of the Association of Fashion Designers of Bangladesh, told The Business Standard that people usually choose afternoons and evenings for shopping. Businesses had to shutter down before 4pm in June. Moreover, people were not buying clothes unless it was absolutely necessary.
Shaheen Ahmed, also owner of Anjans, a leading fashion house, said demand for new clothes has dropped as social events remain suspended and people are not going out much.
Selim H Rahman, chairman of the Bangladesh Furniture Industries Owners Association, said their sales have come down to 35-40 percent from the normal time.
He said, "Decision to buy furniture comes after taking care of food and clothing. No one is renting a new home. Besides, people do not have money. Lack of buyers in our showrooms is a result of that."
Restaurants suffer
Ajmal Hossain, owner of "Charui Bhati" in Motijheel, reopened his restaurant on June 7 with the reopening of offices on June 1. He started it on a small scale but had to close it again a week later because of no customer traffic.
Ajmal Hossain said, his sale was lower than the expenses to keep the eatery open from 10am to 4pm daily, the government mandated business hours."
Although economic activities resumed at the end of the shutdown, only 30 percent of the restaurants reopened till June.
Restaurateurs claimed that the sales of these eateries are less than half of normal time.
Khandaker Ruhul Amin, president of the Bangladesh Restaurant Owners Association, said, "People usually finish breakfast before 10am but we were allowed to open after 10. On the other hand, we had to close within 4pm. We only had the lunch hour for business."
"We have appealed to the public administration ministry to allow restaurants to be open from 8am to 12am. The business will be able to make a turnaround if the hours are extended," he added.
Concerns about the future
Even though some sectors like electronics, construction materials, motorcycles and groceries witnessed a recovery in June, businesspeople said it was temporary.
Syed Alamgir Kabir, president of the Bangladesh Cement Manufacturers Association, said sales had increased in June after the two-month shutdown. However, this growth will not continue because people do not have money in their wallets. At the end of the year, this sector will have to fall into negative growth.
Economists have made similar observations.
Dr Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, said export, big manufacturing and service sectors are yet to bounce back as the Covid-19 situation is still not under control.
The situation in the countries with which Bangladesh's trade is involved has not also returned to normalcy, he added.
Besides, the growth that some sectors are witnessing is temporary as it is the result of pent up demand created in the wake of a two-month shutdown, Dr Mustafizur said.
