Electronics and electrical-appliances industry is emerging as one of Bangladesh's fastest-growing manufacturing sectors, transforming a heavily import-dependent market into a sizeable domestic production base. The rising middle class, fast urbanisation and expanding electrification across the country, besides export prospects, provide the liftoff.
Industry insiders estimate that local manufacturers now supply more than US$4.0 billion worth of electronics and electrical goods annually, meeting nearly 90 per cent of domestic demand.
Over the past decade, the industry has expanded significantly as higher household incomes, easy instalment facilities and improved access to electricity spurred the demand for televisions, refrigerators, washing machines, air-conditioners and other household appliances across urban and rural markets. Currently, around 90 per cent of televisions, 80 per cent of refrigerators and up to 75 per cent of air-conditioners sold are either manufactured or assembled locally, according to industry people.
The market is led by major domestic and multinational brands, including RFL, MyOne, Super Star Group and RR Cables.
While the industry continues to depend largely on the domestic market, manufacturers are eying expanding into overseas export destinations, particularly in South Asia and Africa. Refrigerators, compressors and televisions are among the products already being shipped to overseas markets, although on a limited scale.
Industry executives say some neighbouring states of neighbouring India, Nepal and Sri Lanka could become important export destinations because of geographic proximity and growing regional demand for affordable electronic products. They believe carrying cost between manufacturing hubs of India and bordering states is too high in comparison with that of Bangladesh.
They also see strong export potential in several African economies, where demand for low-cost household appliances is increasing rapidly.
The sector is now witnessing changing consumption patterns as consumers increasingly shift towards modern and energy-efficient products. Demand is rising for air -conditioners for high temperatures, induction cookers, infrared cooking devices, ovens, solar systems and water -purification machines, reflecting changing lifestyles and rising environmental awareness among middle-income households.
However, industry participants say some product categories, particularly refrigerators and conventional household appliances, are approaching market saturation in urban areas.
Television sales, meanwhile, they believe, continue to receive periodic boosts during major sporting events such as the FIFA World Cup, when consumers increasingly purchase larger screens and smart televisions instead of CRT (Cathode Ray Tube).
Despite the strong growth trajectory, manufacturers warn that the industry still faces several structural challenges that could undermine its long-term competitiveness and sustainability.
Industry leaders argue that greater policy support is required to help local producers compete with imported products and expand export capacity. Among the key demands is duty-free import of raw materials and other components used for export-oriented manufacturing.
Manufacturers also want the government to recognise the electronics industry as a backward-linkage sector and allocate a dedicated industrial zone for electronics and electrical goods producers. They have further called for financial incentives, improved infrastructure and long-term policy continuity to encourage investment in technology and research.
A SWOT analysis conducted by The Financial Express highlights both the strengths and vulnerabilities of the sector as the country attempts to diversify its export basket beyond the dominant ready-made garment industry.
Among the sector's major strengths are the country's large and growing population, rising middle-income consumers and rapid urbanisation. Bangladesh also benefits from relatively low labour costs and an expanding pool of technically skilled workers, including engineers and technicians.
The industry has also been supported by a relatively stable macroeconomic environment over the past decade, excepting some years or periods because of COVID-19 and war in Ukraine and Middle-East crisis, which encouraged investment in domestic manufacturing and consumer financing.
However, several weaknesses remain. Industry participants say Bangladesh still depends heavily on imported technology and components, particularly through completely knocked-down (CKD) assembly systems, limiting value addition and technological capability.
Research and development activities or R&D remain inadequate, while local companies continue to struggle with branding, international marketing and customer -satisfaction standards in export markets. Concerns also remain over product quality, as the consumers still comfront low-quality and counterfeit products that undermine consumer confidence and damage the industry's reputation.
Notwithstanding the weaknesses, the sector's opportunities, however, are considerable. Rising environmental awareness is increasing demand for energy-efficient and eco-friendly products, including solar systems, electric cooking appliances and electric bikes.
Bangladesh's vast domestic market also offers substantial room for further growth, particularly in rural areas where electrification and household purchasing power continue to expand.
At the same time, the industry faces several external threats. Manufacturers have expressed concern over policy inconsistency, tariff barriers and para-tariff measures in neighbouring countries, which could hinder the country's export ambitions.
They warned that tariff rationalisation without adequate safeguards could expose local manufacturers to intense foreign competition before the industry becomes globally competitive.
Reliable electricity supply also remains critical as nearly all modern household appliances and manufacturing operations depend heavily on uninterrupted power.
Nevertheless, the industry executives including Vision CEO believe the sector could become an important pillar of Bangladesh's industrial diversification strategy if policymakers provide consistent support and encourage technological upgrading, export competitiveness and local value addition.
With growing domestic demand and emerging export opportunities, the country's electronics and electrical appliance industry is increasingly being viewed as a potential driver of the country's next phase of industrial growth.
jasimharoon@yahoo.com