Electronics, phone makers stare at cold festive sales

Consumer electronics and smartphone companies in India are staring at further delays in supplies of components from China ahead of the crucial festive season owing to a shortage of cargo ships and record rains in parts of the neighbouring country, said industry executives.
The fresh challenges come at a time when the industry is already facing a shortage of components, which has intensified along with price increases in the past couple of months.

Avneet Singh Marwah, chief executive of SPPL, the company that sells Thomson, Kodak and Blaupunkt brand TVs, said supplies from China have been delayed by two-three weeks since ships are finding it difficult to get berths on the ports. “If this continues, there will be an impact on production since we are now gearing up for manufacturing for the festive season,” he said.

Mobile phone maker Karbonn’s managing director Pardeep Jain said every company in the sector is facing the issue of non-availability of ships and containers from China. “While component shortage and 40% increase in prices since last year were already a big challenge, now supply chain issues have emerged. If we have to airlift, the transportation cost would go up five times, which would make it unviable for consumers,” he said.

Executives said the acute shortage of cargo ships from China could be due to the Chinese government’s “unofficial” ban on ships (with Indian sailors) to berth at Chinese ports and load cargo. This could be probably as a way to control the spread of the Delta variant of Covid-19 and create better job prospects for its own sailors, as The Times of India had recently reported.


Sanjay Kalirona, CEO of electronics brand Gizmore, said logistics companies are quoting $700-800 premium over the $3,000 price per container from China after his company failed to get any ships in the past two weeks for its consignment of speakers.

On top of that, a massive flood in Zhengzhou, one of the largest industrial cities in China, last week has impacted some companies since several factories there are now closed.

These factors have exacerbated the already strained supplies of TV panels, chips, motors and compressors, apart from several components used in mobile phones.
Neeraj Bahl, managing director of BSH Household Appliances India, which sells Bosch and Siemens appliances, said availability of components is getting scarce due to the shipping issue which will hit production further considering the chip shortage was already a big issue for the industry.

“Our project to shift top-load washing machine manufacturing to India has now got delayed by 40-45 days since one consignment from India was going to the BSH factory in China for testing which got stuck near the port for several days as the ship was not allowed to unload,” said Bahl.

Record rains last week also impacted production at several factories in China’s Henan province. The world’s largest iPhone assembly plant run by Foxconn is located in Zhengzhou, the largest city in the province, though the company said there was no impact on its production.

Kamal Nandi, president, Consumer Electronics and Appliances Manufacturers Association, said floods led to several factory closures in China.

“Several components come from Zhengzhoufor appliances which are now getting delayed by a couple of weeks. While we have components now, if these get delayed there will be an impact on production,” said Nandi, who is also the business head at Godrej Appliances.