Diwali rush: Fighting supply hiccups, companies rush to stock up to meet festive demand surge

Kolkata: Smartphone and consumer electronics brands such LG, Samsung, Xiaomi, Realme, Vivo, Oppo, Bosch and Siemens are scrambling to ensure adequate stocks in the Indian market for the Diwali sale period, following a surge in overall demand. They are fighting global supply constraints that squeezed the industry during the Navratri sale.LG, Bosch and Siemens are flying in components despite higher cost, apart from running plants 24x7 to ensure sellers have maximum stock, given that Diwali is less than two weeks away. Samsung last week received an import licence for 80,000 premium TV sets, allowing it to clear goods stuck in ports for weeks. TV makers Vu, Thompson and Kodak have beefed up local production, industry executives said. Smartphone makers such as Xiaomi have undertaken fresh imports of handsets from China, besides boosting domestic output. ‘Supplies Better than During Navratri’Realme, Vivo and others are pushing to speed up Customs clearance for components, so they can be rushed to factories. As per industry estimates, 5-6 million handsets have been imported by various brands. “Supplies have improved for Diwali as compared to Navratri, after we crazily indented higher volumes of premium products and components to headquarters for Indian operations. Factories are running at full capacity,” said Vijay Babu, vice-president, LG India.BSH Home Appliances, maker of Bosch and Siemens appliances, transported some components by air so plants can work round-the-clock, said its India chief executive Neeraj Bahl. “Getting containers for imported shipment is a major challenge,” he said. “Our back-up stock period of 90 days is now down to less than 10 days.”Several top smartphone brands imported handsets ahead of the festive season in September and October to beef up supplies, since local production is yet to reach full capacity, said smartphone market tracker IDC India Research director Navkendar Singh. “Stock for Diwali will be more than Navratri,” he said.Xiaomi, Vivo, Oppo and Samsung didn’t respond to queries. 79011140HIGH HOPES OF FESTIVE SALESThe month-long festive season — from Navratri to Diwali, encompassing Durga Puja, Dussehra, Karva Chauth and Dhanteras — is the most crucial period for smartphones and consumer electronics firms since it accounts for 35-40% of annual revenue. It has taken on added significance this year as companies hope festive season sales will wipe out losses incurred during the Covid-19 lockdown, though there is a global scarcity of components for television sets, laptops, mobile phones and appliances, as demand is high and supply chains are yet to return to normalcy.A Realme India spokesperson said it’s trying to hasten Customs clearance for components and increase production speed at factories to meet demand. “The response this Diwali is far beyond our expectations. Due to high demand… we are facing stock issues for some products,” said the spokesperson.Vu India chief executive Devita Saraf said it has an inventory of 100,000 units for Diwali, at par with last year, while it had just 20,000 units for Navratri. These models are all made in India. It took a while to shift production to India, after the government curbed television imports on July 30. However, brands are still worried that stocks may run out during the Diwali period, as Indian consumers are lapping up the latest smartphones and laptops for work and study from home, TVs for entertainment and appliances to automate daily chores.Avneet Singh Marwah, chief executive, SPPL, maker of online-focused TV brands such as Kodak and Thomson, cited global supply chain issues and a shortage of television panels. Leading contract manufacturer Dixon’s chairman, Sunil Vachani, said all brands are pushing hard to get components to build Diwali inventory. LG is concerned there may be a shortage of premium side-by-side refrigerators and microwave ovens during Diwali, while Bosch and Siemens said demand may outstrip supplies for its appliances.

from Economic Times https://ift.tt/3elQ5k5