INDUSTRY ANALYSIS

Pakistan cables and electronic goods industry cover only 3% in large -scale manufacturing index
(LSM INDEX). Pakistan’s consumer electronics market is expected to grow by an annualized
average of about 13.3% or $3.3 billion (460.55 PKR billion ) by 2016, according to a newly released
report by the London-based research firm Business Monitor International. The cables and
electronic goods, defined as including computing devices, mobile handsets, home appliance and
audio/visual products such as television sets, is projected to be worth about $2 billion in 2012.
This is expected to increase to US$3.3bn by 2016, driven by a rising population and growing
affordability. The audio/visual devices segment accounted for about 36% of Pakistan’s cable and
electronic industry. As per Euro monitor, in 2016, mere 55% of households had a washing
machine, 43% had a refrigerator, 20% had a microwave oven, and 16% had a deep freezer.
Product sale of this industry have affected by trends. For example refrigerator, air condition, and
deep freezer sale higher in summer and sale affected in winter. Room heaters, water heaters and
washing dryers have high sale volume or demand in winter. In this sector we have selected
Pakistan electron company (PEL). The major player in this sector are Dawlance, Haier, Waves,
Siemens, Microtech and Pakistan electron (PEL). PEL have two type of direct competitors
according to their product classification. Pel’s direct competitors in Appliance division are
Dawlance, Haier, Orient and Waves. In Power division their competitors are Siemens,
Transfopower, Microtech, Alstom Grid Pakistan. In the power division PEL has a market share of
42 percent followed by Siemens at 34 percent. In home appliance, Dawlance leads the market
with nearly 50 percent market share, followed by PEL at 29 percent. PEL uses different type of
market modes in which include bus branding, cinema campaign, dealer shop inauguration,
advertising and promotional program. Pel use two types of advertising program one is above the
line (ATL) and second one is below the line (BTL). In ATL they uses print media, news vehicles and
newspapers. In BTL the uses closed circuit television, radio and magazine. Several government
regulation and current economic situation of the Pakistan hand a great impact on this sector. Like
FBR allow to import use tv and electronic goods in Pakistan it is a threat for the electronic
industry. Another affect is to increase in inflation. The prices of raw material and labor raising
day by day due to the inflation and obviously the cost of production increases. And other impact
is Pakistan currency going cheaper against dollar cause of this raw material prices increase which
we import. The political condition of Pakistan is highly uncertain and unstable but from few years
we have seen some consistency in Government policies which encourage the foreign investors
to invest in Pakistan. Electronics industry highly effected by consumer taste for example in these
days people use mostly LED TVs if a firm produces LSD TVs their products are not accepted by the
market because in the market have more advance products consumer have use these things and
move on advance things their taste is change. In electrical goods industry, the innovation in
technology or technological advancement is the only factor that can affect the consumer taste
or preferences. If you are more advance you get more customer attention. This industry also
effect by demographic trend for example air conditioner have higher consumption in urban areas
as compare to ruler areas. On the other hand this industry mostly target middle and upper class.
Lower income class, are not able to buy the electrical goods like AC ,Refrigerator ,Microwave
oven etc. Smart electronic devices, green electronic manufacturing and energy efficient products
these are some technological trends that affect this industry. For the competition this industry
has taken flowing steps. First, having internationally compatible products. Second, Capacity to
manufacture and assemble products. Third, Remote control feature, Affordable, Warranted
products and to take care of customer appliances all service centers have latest tools,
equipment’s and machineries. This industry is highly effected by season. In this industry have
some product their sale higher in summer like air conditioner, refrigerator and fans some other
have higher sale in winter like heaters, dryer machines and water heaters. Some products have
stable sale whole year like TVs, water purifier, washing machine and air purifiers. Economic cycles
also affect the this industry for example if country economic condition going toward peak people
generate more income and their purchasing power higher they spent money on these things. If
country economic condition going toward recession people have weak buying power they only
fulfil the basic necessities. This economic condition decrease the industry sale. Some barriers to
enter this industry. High cost of production is one of the main barrier of entering the Cable and
Electrical goods industry. The huge advertisement cost. The faraway Break Even point as it will
take time to set an image in the eyes of consumers and sell them their product. Establishing
dealership network. High costs of raw materials and other inputs (costly electricity and custom
duties on imports of the said units or raw material) and research and development. High taxes in
this sector. Government laws like Electricity Safety, Quality & Continuity Regulations 2009
(ESQCR), Electricity At Work Regulations 1989 (EAWR), and many others. This industry affected
by the performance of other industries. If banks, telecommunication, transport, oil and gas, not
performing well also effect on the industry sale and production.