Domestic refrigerator brands have made a significant progress in the local market. Once the market was fully dependent on imports. But now about 55-60 per cent of our total sales take place in rural areas.
This was disclosed by Sohel Kibria, Head of Brand Marketing and Communication, Minister--MyOne Group, in an interview with the FE.
Following are the full text of the interview:
Almost all of the demand is now being met by domestically-produced refrigerators. The refrigerator market is expanding. Can low-income people now buy domestic refrigerators?
The refrigerator market in Bangladesh is now in a very strong position. Domestic brands have made significant progress in the market. Once the refrigerator market was completely dependent on imports. The market is now under control of the domestic companies thanks to innovation, quality product and affordable prices. From urban to rural areas, refrigerators are considered an essential product for people at all levels. With the change in the rural economy of Bangladesh, the use of refrigerators has increased. The increasing electricity availability and improving quality of life have increased the demand for refrigerators at the rural level as well. This shows that the refrigerator market in Bangladesh is expanding rapidly and domestic companies are playing an important role in this market segment. Refrigerators are now not only for the upper class of people, but also the low-income people have access to these high-end products. Refrigerators are now within everyone's reach due to their affordable price and easy installment facilities.
What are the factors behind the success of domestic companies in refrigerator production as they have overcome import dependence?
Several important factors have been there behind the incredible success of domestic companies in refrigerator production. By breaking away from import dependence and developing their own production, research and technology, domestic companies have not only dominated the domestic market, but also have started exporting their products abroad. There are some exemptions in customs duties on local production. On the other hand, the customs duties on imported foreign brand refrigerators are slightly higher, which has given domestic companies an advantage in the market. Bangladeshi companies are building their own research and development units and manufacturing various important components of refrigerators themselves. The availability of domestically-trained manpower and relatively low-cost labour made it possible to reduce production costs. The rapidly growing middle class in Bangladesh and the provision of electricity to most parts of the country have increased the demand for refrigerators in rural areas. This large market has made investments of local companies safe and profitable. Domestic companies have brought refrigerators of various designs, sizes and colours to the market, understanding the taste and budget of consumers. These refrigerators have been equipped with international standards of energy efficiency and various types of smart technologies. By manufacturing products maintaining international standards, domestic companies are now exporting to various countries including Europe, Africa, and the Middle East. Due to the foresight of domestic entrepreneurs, domestic companies have now overcome import dependence and have become internationally competitive beyond the borders of the country.
How is the demand for refrigerators outside urban areas and in remote rural areas?
There was a time when it was thought that the big market for electronic products was limited only to the capital Dhaka or urban areas of the country. But now the picture has changed a lot. The sales of various types of domestic electronic products, including refrigerators, have now increased significantly in remote rural areas. Buyers in villages or sub-districts are looking for long-lasting and energy-efficient refrigerators, which also run well in the event of problems with power supply. About 55-60 per cent of our total sales are now in rural areas outside Dhaka. Sales are increasing rapidly, especially at the upazila and village levels.
Eid-ul-Azha is drawing near. Buyers have a tendency to buy refrigerators during such a period. Are you offering any special benefits to buyers on the occasion of Eid?
In our country, the demand for refrigerators is there all the year round, but the demand for refrigerators and deep freezers usually increases significantly around Eid-ul-Azha. Especially on the occasion of Eid-ul-Azha, the demand for deep freezers is very high for preserving meat. During this time, many families decide to buy new refrigerators or deep freezers, as a result, sales increase manifold. The Minister brand has brought the "Buy a Fridge, Win an OX" (Hambba) offer, Season-2, for esteemed customers on the occasion of the holy Eid-ul-Azha. The "Buy a Fridge, Win an OX" offer on the occasion of last year's holy Eid-ul-Azha received huge response from customers. To encourage customers, we have brought the "Buy a Fridge, Win an OX" offer this year, Season-2. In this offer, customers will get a scratch card on purchasing a fridge and by swiping the card; customers can get a free cow or buy a fridge and get a free fridge, guaranteed huge discounts and attractive gifts. We also have easy installment facilities for the customers and EMI facilities on credit cards of various banks.
Please tell us about your after-sales services?
Customer satisfaction is our biggest achievement. Therefore, Minister is working with utmost importance not only to ensure the quality of the product, but also to ensure after-sales services. With more than 300 service points across the country and its own call centre, Minister ensures after-sales services through 24/7 customer service and warranty coverage. In case of any mechanical failure, many skilled teams work round the clock across the country to provide quick services to the customers.
What do you do to keep the price of refrigerators affordable to the buyers amid inflation? What kind of steps are you taking?
Most of the manufacturing factories are dependent on electricity and gas. Due to inflation, rising electricity and gas prices and the dollar rate, production costs are increasing, which is also increasing the price of products. The cost of running offices and showrooms has also increased. To cope with this adverse situation, some strategies have been adopted, through which it is possible to keep business expenses under control to some extent. Efforts are being made to reduce costs by increasing automation in the production process. Initiatives have been taken to ensure more production at less cost by increasing the efficiency of manufacturing units. Plans have been drawn up to reduce dependence on electricity by using solar panels. Instead of high-interest bank loans, a strategy is being adopted to collect funds from investors. Corporate expenses are being reduced, unnecessary expenses are being eliminated, and financial management is being strategic. Efforts are being made to reduce unnecessary expenses and maintain profitability by monitoring each area of expenditure and ensuring easy installation facilities and discount offers for customers. Initiatives have been taken to maintain purchasing power.
Do you see any obstacle the refrigerator sector faces along its path of development?
Currently, due to various challenges in the global and domestic economy, there is instability in the market. One of the reasons is inflation and the continuous increase in foreign exchange rates. Especially, the increase in the value of the dollar has increased the cost of imports, which has had a direct impact on various industrial sectors as well as refrigerator production. Several raw materials and components required for making refrigerators have to be imported from abroad, but due to the high value of the dollar, the cost of importing these materials has increased much more than before.
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