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Major home appliance providers reduced their prices by around 20% in response to a government initiative to reduce prices by 15-20%, as well as a stronger EGP against the greenback, leading local players told EnterpriseAM.
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Some household names were among those with sizable reductions, including Beko Egypt with a 20% discount on its home appliances “to help ease the burdens on Egyptian families, in line with the government’s directives and the Consumer Protection Agency’s efforts to regulate prices and enhance market stability,” the company said in a statement (pdf). El Araby Group also revealed discounts on all home appliances, including refrigerators, washing machines, and televisions, a company representative told EnterpriseAM. Unionaire, too, announced price reductions.
Part of the reason is overproduction and market stagnation, which has pushed manufacturers to respond by cutting prices, head of the Federation of Egyptian Industries’ Home Appliances Division Hassan Mabrouk told EnterpriseAM. Seasonal air conditioner sales have seen low demand despite extreme heat, pushing distributors to give up a large portion of their margins in exchange for sales incentives to fulfill their quotas from manufacturers, he explained.
Increased investment from global companies in the local home appliances manufacturing sector has ramped up production and market competition, which also contributed to the price cuts in the sector, Mabrouk said, pointing to the influx of Chinese and Turkish investments in the sector. Between three and four new factories are under construction this year with investments of around USD 200 mn. One of the factories, which is awaiting its official opening, has already started distributing products in the local market through contract manufacturing, adding to current competition.
The localization of supporting industries and a halt on imports of home appliance components have been supporting growth in the sector, Mabrouk said. These include the local production of refrigerator compressors, air conditioner compressors, safety valves, and motion dynamics. The local component ratio for some appliances is expected to increase within months to 80% for cookers and 70% for air conditioners and refrigerators, once compressors are produced locally and used by other factories, Mabrouk added.
