Once fully dependent on imports for electronic products, Bangladesh is now an avid exporter of home appliances such as televisions, refrigerators and washing machines to the global market, earning $22 million in foreign currency during the Fiscal Year 2020-21.
Aside from the above mentioned three, the country also exports freezers, beverage coolers, air conditioners, blenders, rice cookers, electric fans, laptops, gas stove, compressors and mobile phones.
The Export Promotion Bureau (EPB) data shows that Bangladesh’s $22 million earnings from electronic product exports rose by a staggering 1,275 per cent in the last fiscal year, compared to $1.60 million recorded in FY2019-20.
Of the total export earnings in FY21, the highest $10.63 million came from refrigerators, $6.42 million from televisions and $2.27 million from air conditioners.
Bangladesh also exported freezers worth $1.10 million during that period, followed by washing machines $279,657, blenders $134,132, gas stoves $150,895, rice cookers $317,673, electric fans $424,790, laptops $13,603, compressors $900,830 and mobile phones $250,828.
Walton – a local electronics industry giant – is currently exporting to India, Nepal, Maldives, East Timor, Mexico, Romania, Greece and other countries.
What’s behind this growth?
Policy support and cash incentives on exports, as well as tax waivers, have helped the sector a lot in expanding both the local and global markets, industry insiders told The Business Post.
High-tech products such as HCFC-free refrigerators and home appliances including electronic goods currently enjoy a 10 per cent cash incentive against export under the consumer electronics, electrical, home and kitchen appliance sectors.
Besides, the National Board of Revenue (NBR) recently reduced corporate tax to 10 per cent for companies manufacturing air conditioners, freezers, refrigerators, compressors, and motorcycles for the next 11 years.
Commenting on the matter, Walton Hi-Tech Industries’ Managing Director Golam Murshed said, “It was our dream to create a brand in the electronics arena to win the hearts of people and pave the way to enter into the global market.
“Our primary goal was to reduce import dependence and make the country self-sufficient in meeting its demands for electronics products and home appliances from domestic sources. We have almost achieved our goal.”
He continued, “We also wanted to save foreign currency by producing electronic products, and we have done it as the domestic market is now saturated with local brands.
“The domestic market is being dominated by local brands, so now our target is to become one of the top five global electronic brands by 2030. To attain this goal, we are focusing on export markets, and have received a good response from the buyers.”
Murshed added that Bangladesh’s export earnings from electronics will reach $100 million by the next year, and it is quite possible as we are producing international standard products and offering it at a reasonable price.
Walton is exporting home appliance products such as refrigerators, freezers, beverage coolers, air conditioners, televisions, washing machines, blenders, gas stoves, rice cookers, electric fans, laptops, compressors and mobile phones.
“We would like to focus more African-Asian countries, as these markets are showing a big opportunity for growth,” Murshed said.
What does it mean for Bangladesh?
Commenting on the electronics export boom, Centre for Policy Dialogue’s (CPD) Research Director Khondaker Golam Moazzem said, “As Bangladesh is now highly concentrated on export diversification, a sharp growth in electronics exports is a good sign for the country.
“It indicates a graduation of our industrialization – from low end to high end products. Bangladesh is steadily stepping into the tech-based industry. The rising trend in exports in the tech-based sector will help attract Foreign Direct Investment (FDI), and open new joint investment opportunities.”
Giving a few recommendations, Moazzem said, “For expanding exports, we have to create more channels. Right now, what is being done mostly by Walton should spread among other manufacturers.
“The government should come up with more incentives and policy measures. The path towards growth was not easy, but policy support introduced by the government has provided a cushion against the hurdles faced by this sector.”
He continued, “The government policy is in favour of growth. We need continuation of the existing trade benefits to grow further. Cash incentives and tax cuts for manufacturers are great incentives for the industry to grow further – both in domestic and foreign markets.
“To expand the export volume, our target is to explore new markets abroad and diversify products through research and innovation. To this end, the government should provide all out support and take steps to brand Bangladesh as an exporter of electronic goods.”
If Bangladesh wants to reduce its export dependency on a single sector – the readymade garment industry, hi-value tech-based products should be the country’s next frontier.
On the issue, former advisor to the caretaker government AB Mirza Azizul Islam said, “The economic landscape evolves with the flow of time. Currently, as an export-led economy, RMG is the country’s highest contributor – which is a weakness in achieving sustainable growth.
“Now is the time for the country to move towards high-value products from low-value ones. If we look at Vietnam’s export products basket, we will find that they have a diversified portfolio. It has given the country a leverage to expand their export earnings.”
“We must do whatever takes to ensure that the current trend of electronics and other exports continues, which will allow us to reach new heights,” he told The Business Post.
What about the domestic market?
According to the DATABD.CO – a source for business data in Bangladesh, the country’s local consumer electronics market stood at $3.14 billion in 2020, which is expected to grow to $5.17 billion by 2025.
Walton, Vision, Minister, My Choice, Jamuna, and Nova are currently manufacturing and assembling electronics goods in Bangladesh. Of them, Walton is exporting different types of electronic goods to various countries.
Local brands are dominating the market, replacing foreign brands such as Sony, Samsung, Singer, LG, Panasonic, Toshiba, and Philips.
Walton holds around 25 per cent share of the local television market, while Minister holds 3 per cent, Vision 2 per cent, and Jamuna 1.5 per cent of the market share.
On the other hand, Samsung holds 11 per cent, Singer 9 per cent, Sony 5 per cent, and LG 4 per cent of the total market share.