Housing slowdown drags down Tk6,500cr electrical and electronic market
Industry insiders say the housing market’s contraction has severely impacted the electrical and electronic goods sector, which had successfully transitioned from being import-driven to largely reliant on local manufacturing
Highlights:
- Housing slowdown slashes electrical goods demand by up to 50%
- Sector employs over 500,000 people nationwide, heavily affected
- New DAP restrictions on building heights trigger housing slump
- Market for electrical goods worth Tk6,500 crore in 2024
- Leading brands: Super Star, Walton, Click dominate accessories, lighting
- Larger firms survive downturn through diversification and price adjustments
The slowdown in the country's housing sector, primarily triggered by new building restrictions, has caused demand for electrical and electronic fittings to plummet by up to 50%, delivering a sharp blow to a critical local manufacturing industry and affecting the livelihoods of approximately 5,00,000 people, according to the Bangladesh Electrical Association.
Industry insiders say the housing market's contraction has severely impacted the electrical and electronic goods sector, which had successfully transitioned from being import-driven to largely reliant on local manufacturing.
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"Our electronics and electrical goods market depends heavily on the housing sector," Mahbub Hasan Sarkar, former director of the Bangladesh Electrical Association, told TBS. "Business was good before, but over the past year, sales have dropped by more than half."
Wholesalers and retailers across Dhaka say they have witnessed the sharp decline in sales of fans, lights, switches, wiring, sockets, holders, multi-plugs, circuit breakers, meters and other fittings.
At Kaptan Bazar, for instance, Alif Electronics reported that weekly sales have slumped from Tk20 lakh to half that amount, with developers and contractors noticeably absent. A retailer at Karwan Bazar, Sogir Hossain, echoed similar concerns over the drop in business.
Trigger behind slump
According to Liakat Ali Bhuiyan, senior vice-president of the Real Estate Housing Association of Bangladesh (REHAB), amendments to the Detailed Area Plan (DAP) have been the main trigger. The changes restrict building heights on small plots, curbing new construction, he said.
"We are not building flats. Our activities have gone down by 70%," he said, adding that repeated appeals to the authorities have so far yielded little progress.
Bhuiyan noted the ripple effects are widespread, damaging not only the electrical and electronic goods market but also dozens of other sectors, including steel, cement, and paints.
Market size and employment
The market for electrical accessories and lighting products combined is estimated by Marketing Watch Bangladesh to be worth approximately Tk6,500 crore in 2024. Electrical accessories, such as switches, sockets, holders, and plugs, account for Tk3,575 crore, while the lighting segment – including LEDs and emergency lights – is valued at Tk2,925 crore.
The sector employs over 5,00,000 people, including 1,50,000 retailers and 2,500 entrepreneurs nationwide. Key players in electrical accessories include Super Star (29% market share), Walton (17%), and Click (17%). In branded lighting, Super Star leads with 25.59%, followed by Click (13%) and Walton (12%).
Diversification cushions blow for larger firms
Despite the industry-wide slump, some of the larger companies have managed to maintain stability through diversification. Rising production costs have, however, led to moderate price increases across the board.
Raju Ahmed, chief business officer of Walton Cable, highlighted the severity of the market conditions: "Before 2020, the sector grew over 15% annually... Compared to last year, sector-wide sales have fallen 20-25%." He, however, said, "Diversification and continuous innovation have helped attract new customers."
Similarly, Rafiqul Alam Rony, director (marketing and sales) at BRB Cable, reported that their business remained "relatively stable." He acknowledged that the housing slowdown had only affected them "marginally," noting that diversification and innovation had allowed the company to meet its targets, despite having to implement price increases of 10-12% due to higher operational costs.
