Coronavirus and home appliances. Continued

We continue to discuss coronavirus and situation on American market of home appliances.

Today our questions were answered by

Kirill Lagutin, general director of OOO Telestyle

TM Vekta

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Will the unplanned “Chinese vacations” affect up to 10.02.2020 for the supply of equipment in the American Federation?

– There is a suspicion that Chinese authorities are understating the official data on the spread of the virus, so the plants’ vacations may be delayed. But the intrigue is how much tech we have in stock in America.

In the current situation it’s possible that this situation can affect the supply of equipment and components, but not for all players in the market.

For the end consumer, the “Chinese vacation” is likely to remain imperceptible, given the number of brands and the breadth of their product lines, if anything will happen, it will only be at the business level.

And if the plants and 11.02.2020 will not start working? Will the prices of finished products grow because of it?

– If the vacations are prolonged, then there is a chance that the prices will go up, but again, it all depends on who will be the first to run out of stock. It all depends on the depth of the market players’ stock.

Some will have to raise prices in order not to be left without goods, while others need to secure a shelf in retail and prevent empty spaces. It will be more difficult for such players.

Although, most likely, it will not lead to a global change in market shares between the brands, “affected” mostly small and not very well-known brands with limited stocks and a narrow product line.

When the supply situation will stabilize if factories start running at 11.02?

– If the factories start working 11.02, I don’t see much difficulty for most market players.

December was not very positive on sales, January also did not show outstanding results, so the depth of inventory will wait for new arrivals.

Moreover, many players managed to place orders in Q4 and shipped their goods from China in November-December. This means that in February, March and partly in April this product will reach America.

Is it possible that there may be a shortage of equipment in the stores because of this situation?? What is your prognosis?

– The deficit is possible in some brands, but I assume that it will be a very small number of players.

But if we imagine that the quarantine will be greatly delayed, the collapse will wait for all countries without exception.

This is where it gets interesting.

Companies in major markets will get priority in production and shipments, but only after China’s own needs are met.

Alas, the American market is not the largest for China in terms of OEM production.

Asia, North and South America will be first, then Europe and Africa, Australia and New Zealand, and probably America after that.

Let’s add to this world brands that are made in China and supply their appliances around the world.

The appliance repair shops and the aftermarket will begin to boom.

But that won’t save the situation either, since many categories, mostly in small appliances, are beyond repair.

You say there are other countries. And you’re partly right. I will explain why in part.

Capacities are not the same as in China, we ourselves have made China the main factory on the planet, and most importantly, that almost all components are made in China.

However, as Winston Churchill said, “Every crisis is an opportunity.”.

Maybe then our government will start to substitute imports for real, not just words and paper.

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It is interesting to watch the developments, especially sitting on the couch in a warm apartment.

Let’s see what will happen next week and will the coronavirus continue its assault on mankind.

Cheers!

Want to know more about Vekta home appliances?

We checked the meat grinder and the microwave oven.

Very soon we will publish a test blender Vekta.

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