This Diwali, consumers may find relief from inflation, as prices of electronic goods like mobiles, TVs, and laptops are expected to fall due to an anticipated surge in demand.
Revival of the Electronics Market
Companies may offer significant discounts to boost the demand for electronic products, which has been sluggish over the past year due to high costs. With the predicted increase in demand during the festival season, companies are optimistic about seeing a rise in profits.
Drop in Transportation Costs
Transportation costs, which had skyrocketed during the Covid-19 pandemic, have now significantly reduced, thereby potentially contributing to the decrease in product prices. At the height of the pandemic, freight costs from China were around $8,000. Now, these costs have dropped to between $850 and $1,000, according to the Economic Times.
Reduced Semiconductor Chip Prices
The prices of semiconductor chips, another major component of electronic devices, have also declined from their record high during the Covid period. Industry insiders note that prices of electronic components have decreased by 60-80%.
Stable Raw Material Prices
According to Anil Rai Gupta, Chairman of Havells India, prices of raw materials have remained stable for some time, leading to expectations of profitability. Some industry executives point out that freight costs are still 4-5% higher, but this increase is offset by the weak demand.
Summary:
- Expectations of a surge in demand for electronic products during the Diwali season may lead to significant price reductions.
- Reduction in freight costs and semiconductor chip prices are contributing to the expected decrease in product prices.
- Companies are hopeful about a rise in profits due to the anticipated increase in demand.
- Raw material prices have remained stable for some time, further fueling expectations of profitability.
