Starting off as just a small outbreak from China, The COVID 19 has expanded its footprints across the world and affected the global economy and its components. The first thing to be affected by the outbreak was industrial production, which was where most of the electronics productions were done. This hit the GDP growth rates as well as the sale of electronics and its components quite hard. A lot of people went through hardships and job losses and lost their means of income, which further aggravated the situation and brought down the purchasing power of the common people. This decreased sales across all segments and sectors including electronics which was especially hit because it is not considered essential.
The electronics industry is an important one for the growth of any country and includes things like ancillary parts, electronic components and electronic devices like mobiles and television. Since most of these things are not essential for living they were considered as non-essential items.
During lockdown periods across the world, retail shops were closed and online ordering was only available for essential items. This brought down sales of electronics goods quite down and brought the industry as a whole to a standstill. Even now when we are a couple of months into the outbreak, many companies are still struggling to sell their products and are posting huge losses every quarter of the year. These include things like mobile phones, Videos Games and DSLR cameras. On the note, if you are a beginner at photography, do check out these Best DSLR cameras for Beginners.
The obstacles that the Electronic sector faces
Due to the outbreak of COVID 19, along with the sales of many items of the electronic sector, the supply chain was also adversely affected. The effect on the supply chain had a butterfly effect on other sectors which were related to it and this aggravated the condition. Even if somehow deliveries were made from warehouses, they required an intensive level of sanitisation before they were dispatched which increased costs in the time when many companies were laying off workers as a cost-cutting measure. The tragedy was that many of the sanitizers themselves were not willing to touch the products in fear of getting infected, not to speak of those who had to deliver the items to the customer.
There is also the fact that a lot of countries all over the world are dependent on East Asian countries like China, South Korea, Japan and Taiwan for electrical components. And these destinations were one of the first places where lockdowns were implemented to prevent the outbreak. This constricted the supply chain and many companies were unable to complete the final products due to a shortage of parts. This was especially true for the automobile industry which other than China, is mostly based in the US which is also suffering severely from the virus outbreak. Due to the serious nature of the pandemic, many corporations have still not started production which has made the parts an expensive commodity for the rest of the manufacturers.
The crisis has now spread across the supply and value chain, with not only shortage of material holding back electronic sales but also the problems acquiring what little manufacturers could afford to buy due to travel restrictions in many parts of the world. The effect varies across segments to segment, for example, most IT and computer parts, as well as automotive electronics, are dependent on imports from countries currently suffering majorly from the lockdown restrictions.
Countries like China, the US and the European Union are some of the most adversely affected countries and have suffered a dent in trade and manufacturing. The damage done by the virus outbreak cannot still be figured out easily but it certainly had far-reaching consequences both to Industries as well as economies.
The leading electronics production houses across the world have announced a decrease in production in the delay of new products. For example, China produces nearly 75 percent of value components used in TVs and this is increased to almost 85 per cent in the case of smartphones. The lockdown there initially forced the manufacturers to halt production and even now when it is slowly resuming the cost is slightly higher to compensate for all the extra measures that need to be taken.
Many other giants of the electronics industries like Panasonic, Samsung, and LG have raised prices by a significant 3 to 5 per cent which converts to a hike of thousands for expensive electronics. Electronics companies usually keep as backup stock of the raw material that they would need, but that is capable of only lasting for a couple of weeks. The expected lockdown forced them to use up their stocks and this resulted in production problems.
What can be done?
The way that everything works has drastically been changed by the virus outbreak and that remains true even in case of electronic sales. The electronic industry needs help as well as new supportive policies to ramp up production keeping in mind a long time frame of about a decade.