Editors' Note: The Industry Dialogue is a multi-part series by News18.com in which the industry talks about the impact of the Coronavirus pandemic and the challenges because of the COVID-lockdown, as well as the possible solutions and measures to get the economy back on track at the earliest.
The coronavirus pandemic has impacted several industries and resulted in a temporary suspension of operations in manufacturing and other units. Several industries have been severely impacted by the crisis caused by the pandemic. As the crisis continued to build in the month of February, the electronics industry was hit by the less supply of components and raw materials from China, which was the epicenter of the pandemic. During this time, TCL also faced a supply shortage but continued to build inventory to ensure that there was no lag in shipment. As an electronics giant, we averted a major crisis and continued shipment supply to register a 20% recovery in the first week of February. During the January to March quarter, the shipments increased by a whopping 90% compared to the same period in the last few years. In terms of demand, we did not see a significant drop in sales in different regions.
The rapid spread of the deadly coronavirus has been a matter of great concern for governments of several countries. Among the several stringent measures, governments have called for nationwide lockdowns and asked people to practice social distancing. These measures have, in turn, compelled businesses to ensure safety of their employees and allow remote work from home. Manufacturing units and factories have been badly affected and have had to halt their operations. While the current situation is grim and there are no immediate solutions, the industry, as a whole, is hopeful of returning to normal operations in the near future.
In February, however, the Covid-19 spread rapidly to several parts of Europe and the crisis deepened. As a result, several industries took a hit during this time. TCL witnessed a sales decline of 50-60% in the month of February. During this time, the declining sales in retail stores compelled the company to shift its focus toward online channels. As a result, the company did not take a severe hit and looked to consolidate its inventory during the difficult time. TCL, however, has not let the pandemic take a heavy toll on its manufacturing operations and capabilities. Anticipating a shortfall in supply when the outbreak first began to spread, TCL continued to ramp its manufacturing operations in the beginning of the calendar year. As the latter half of January was marked by celebrations of the Chinese New Year, there was not a major impact on operations at this time.
There is emphasis on the need to maintain sufficient inventory to reduce the pressure on the supply chain in the current crisis. As customers are confined to their homes in a lockdown situation, it is imperative to stress on the importance of shifting focus from offline channels to online channels. As watching television and entertainment shows is likely to increase during this period, we at TCL do not foresee a decline in demand for TVs. In fact, the belief is that watching entertainment shows can lower stress and have a positive impact.
About the Author:
Mike Chen is the Managing Director of TCL India.