Rapid urbanisation and its attendant expansion of electrification work have boosted domestic demand for electrical goods including both accessories and lighting products over the past decades. The good news is that local firms producing electrical goods have gradually built their capacity to grab the lion's share of the market. These include producers of some local brands that are learnt to have been marketing their products much to the satisfaction of conscious consumers. A study recently done by a Dhaka University-based marketing research body, 'Marketing Watch Bangladesh (MWB)', corroborates this view. The findings of the said study show that 94 per cent of the electrical accessories and 89 per cent of the lighting products in the market are local brands.
Many of these electrical products, because of their quality endorsement, are exported to highly sensitive overseas markets including those of the USA, Canada and Mexico, Germany, Italy France, Denmark and Finland, market operators say. Obviously, the credit for that goes to those local entrepreneurs who are manufacturing high quality lighting products as well as electrical accessories for residential and industrial use. This has been possible, thanks to the tax regulatory authority which has extended duty benefits to facilitate import of electrical components including chips (semiconductors).
This definitely speaks well for the local electrical industry and the economy. But what is worrying at the same time, as the said marketing research body also has found out, is that nearly half of the electrical products and accessories in the market are either low quality, non-brand, locally-made goods or fake ones imported by way of evading taxes. Unsuspecting consumers are not only being cheated, they are also exposed to risks ranging from possible damage to their household appliances to serious accidents of electrical origin.
Since some consumers, due to their insufficient knowledge of electrical gadgetry, cannot sometimes distinguish between the fake and genuine electrical goods, lose faith in the local brands. It may be mentioned here that electricians, many of whom are self-trained and have an axe to grind, often take the households hiring them to fix electrical problems for a ride by purchasing the substandard products. Evidently, this grey market of electrical products is proving to be a considerable roadblock to the next level of growth of the local electrical products. Notably, the present size of the electrical accessories and lighting products market is around Tk60 billion and the market is growing by 11.5 per cent annually. Happily, the local electrical goods market has grown about three times its size a decade ago when it was worth only Tk 22 billion. So, survival and growth of the local electrical goods industry is vital not only for the business as such, but also for the livelihood of around half a million people directly and indirectly employed in this sector. Of them, 150,000 are retailers dealing in electrical goods, while 2,500 are the entrepreneurs running the show. The pace at which the sector is growing currently demonstrates its potential to become an engine for job creation. In that case, the government needs to intervene to hold the grey market of electrical products in check. At the same time, it should relax its regulatory measures including duty, VAT, etc where possible to promote further growth of this sector of high potential.
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