Companies are not sure that demand will pick up, even if the govt does allow manufacturing to resume
Many in the industry are worried about a possibility of labour shortage after the lockdowns are lifted
NEW DELHI :
Electronics companies have a steep road ahead even after the covid-19 related lockdown comes to an end. Factories may struggle to ramp up production with daily wage labourers and workers migrating back to their villages because of the lack of income during the lockdown.
“Even in China, it took them two to three weeks to return to normal operations," said Arjun Bajaj, director of Videotex International Pvt. Ltd, a television manufacturer. Companies will take at least 15-20 days to get things back up to speed, he said. Many in the industry are worried about the possibility of labour shortage once things open up, according to Bajaj.
Workers and daily wage labourers in cities recently set out for their hometowns in droves with factories and other businesses coming to a halt. The government eventually barred them from crossing borders, but many had left town before the borders were sealed.
Worker migration isn’t an “acute challenge" for the industry, but it will take “about four weeks for 80% normalcy to be achieved" once work resumes, according to Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association (ICEA).
Worker shortage isn’t the only problem the electronics industry is facing. The pandemic has also reduced demand for these products in the country. Companies are not sure that demand will pick up, even if the government does allow manufacturing to resume, said stakeholders.
Demand won’t be the same for 6-7 months more, said Manish Khatri, Partner at retailer Mahesh Telecom. Retailers will incur costs from rent, salaries, and investments while business is down, he said. They are thus likely to cut down on investments and liquidate non-moving products.
Malls and retail locations being shut in the near future will affect sales, said Bajaj. Aman Gupta, co-founder of boAt Lifestyle, a headphone maker, said he expects sales to pick up in a “staggered manner" even after the lockdown ends.
“Offline sales will remain affected even after the lockdown lifts as people will avoid going to them as a general precaution," he said. Gupta pointed out that the same thing had also happened in China after the country’s lockdown.
The electronics industry has been among the worst-hit due to the lockdown. The industry first had to face supply shortages as factories in China were shut down. Now that factories there have opened, those in India are shut.