Nov 23, 2016 (LBO) – Sri Lankans still demand basic products such as refrigerators and washing machines due to the country’s low penetration levels although income levels of consumers have improved significantly, an official from the consumer durables industry said.
“The consumer durables industry is primarily driven by growth in disposable income, but while income levels have improved, there is still demand for basic products such as refrigerators and washing machines due to low penetration levels in the country,” Asoka Pieris, group chief executive, Singer (Sri Lanka) said.
“The advancement in technology, shorter replacement cycles, and changes in lifestyles are also driving demand for consumer durables and electronics.”
He was speaking at an Asia Securities event titled “Poised for a Shopping Spree” held in Colombo under its’ Wealth Insights Series’.
The “Wealth Insights” series which has garnered significant investor interest, focuses on investment ideas and outlook for key sectors.
Presenting highlights from the research reports, Asia Securities, Research Manager Mangalee Goonetilleke said that long-term growth story for the Consumer and Retail industry remained on track, despite headwinds in the near-term.
She also pointed out that due to monetary and fiscal policy tightening to the upward trajectory in income levels as the key factor which will sustain demand in the long-run.
Speaking on consumer food, John Keells Holdings President Jitendra Gunaratne said he saw a significant growth in the country due to higher disposable income levels in the last three years.
“Rural consumption levels outpaced urban consumption and said that going forward companies will need to be nimble and relevant to offer the correct product range as consumer lifestyles have changed,”
“The perception of supermarkets being high priced is diminishing, while the ability to shop in one destination is fueling the growth of the modern food retailing space.”
Hemas Manufacturing, Managing Director Roy Joseph said in addition to growth in income levels, the sophistication levels of the broader Sri Lankan consumer has also increased.
Furthermore the growth in income levels within the rural population in the country has led to rural households now accounting for a significant part of the personal care market demand, he said.
He also pointed out that an increased number of women in the workforce is another driving factor for personal care products across the country.
Nielsen Sri Lanka, Managing Director Sharang Pant shared his learnings from other comparable countries said that in economies which surpasses the 3,500-4,000 US dollar Gross Domestic Product per capita income levels, one of the key trends to note is the movement towards non-essential items.
He said food and beverages will not slow down, it will reduce as a percentage of total spending.