Exclusive ranking: Philips snatched Samsung from the top spot in the TV business and a "cover" comes up on cell phones
If there is a sector that is having a bad time as a result of the jump in the dollar and the fall in purchasing power, it is electronics.
There are several symptoms that show that this 2019 is on its way to becoming the worst year since (a decade ago), the pole that operates in Tierra del Fuego and that today supplies more than 90% of the TVs , cell phones and air conditioning equipment purchased in Argentina.
In the last four months, two companies ceased production: Aires del Sur and KMG, thus raising to 13 the number of plants that, for different reasons, closed their doors in this last time.
Regarding retail chains, 2019 was also critical: the Necxus ecommerce platform, which had incurred debts for more than $ 930 million, requested the opening of a preventive bankruptcy.
A similar decision was then made by Ribeiro, after registering a red of more than $ 680 million during the first quarter. On the side of Garbarino, he managed to close an agreement to restructure a financial debt close to $ 4,000 million and hung the "for sale" sign.
So the situation is really complex and the concrete reason is that Argentines buy fewer technological items.
The numbers speak for themselves: according to information based on data from the General Directorate of Customs (DGA) accessed by iProUP:
- Between January and June, 5.4 million units entered the consumption centers, both from abroad and from Tierra del Fuego.
- In the same period of 2018, almost 9.8 million devices had entered the country, which implies a 45% collapse
This sample is highly representative because it counts various categories such as televisions, cell phones, notebooks, air conditioning and audio equipment.
To get an idea of how much the electronics business shrunk, it's worth another comparison; In the first half of last year, the entry of products from Tierra del Fuego (and to a lesser extent from Brazil and countries in Asia), mobilized US $ 2,110 million. Between January-June of this year that amount collapsed to US $ 937 million (-55%).
And, according to Eduardo Echevarría, project manager of the specialized consulting firm GfK, "the market will fall much more after the advance of the dollar that was post primary elections."
"There are two factors that today play against the business: the fall in real wages, which is very pronounced; and the change in expectations, which leads to fewer consumers wanting to borrow. To this are added the price increases in the electronic sector and white line, which will worsen the outlook for the sector, "he says.
Some winners and many losers
Undoubtedly, one of the most affected categories is that of televisions: between January and May, retail sales were sprayed almost 50%, basically because it compares against a time of 2018 in which the expectation for the World Cup in Russia was and the Dollar averaged $ 25. That is, prior to the first big run, when the price soared above $ 40.
It is true that in the last week of June and throughout July the fall rates were moderated, thanks to the Now 12 plan, which was relaunched by the Government to give some oxygen to consumption before the elections. However, the reality is that without the "anabolic" that knew how to have this item, as was the World Cup, and with a more deteriorated purchasing power, few brands were successful.
According to a ranking accessed by iProUP, if there is a company that lost the pulse in the face of the crisis, that is Samsung. In recent years, with more or less slack, I was leading the wholesale business of LED screens. However, according to the customs records corresponding to the first semester, the South Korean giant lost a lot of ground and got off the first place, to be overcome by another competitor who was stepping on his heels: Philips.
Last year, for that same date, Samsung had been taking the World Cup off and accumulated a jump of more than 40%. Now, with a share of less than 15%, there were several steps below Philips, which secured the first place, with a share of more than 20%.
In this brand war, another company that was able to win positions was TCL: from being in seventh place in 2018, it moved to third place (12% share) in the ranking of the main players in the national market.
On its rise, TCL snatched the space from LG, which suffered a sharp collapse in the volume of televisions dispatched for sale and descended five steps, to position eight.
In parallel, the top five Noblex and Hitachi brands complete, which managed to maintain the same position they had last year.
The following table shows the ranking of the first fifteen companies that dominate the television business.
The TV category is undoubtedly among the most punished. The problem is that, after the early elimination of the national team in Russia and the jump in the exchange rate, sales almost paralyzed and there were more than 750,000 LEDs stacked in the manufacturers' warehouses and in retail chains.
Cleaning up that excessive stock took time. And while Now 12 is helping to drive sales a bit, the numbers are eloquent: in the first half, the brands operating in the country dispatched to the chains only 767,000 units, 70% less than in the same period of 2018 .
And this, logically, had an impact on the volume of money that moves the category: if it was a business valued at almost US $ 800 million, it collapsed to US $ 150 million (-80%).
In this context, the companies operating in the Fuegian pole are not optimistic: before the dollar jump they estimated that some 2.2 million units would come out of the assembly lines this year.
This figure, if confirmed, would not only imply a significant drop compared to the 3.3 million screens that were produced in 2018, but it would be the worst year since then President Cristina Kirchner relaunched the Tierra del Fuego regime, ago one of each. However, the figure could be revised downward after the devaluation.
Cell phones, in fall
"The mobile category is going through a difficult year," says Estefanía Gilardenghi, project manager of the GfK consultancy and specialist in the smartphone segment.
According to the expert, the fall in purchasing power and the economic crisis caused a marked contraction in the number of brands available and led to a reduction in the supply of models, especially in the entry-level segment, which fed back the fall of the sales
According to Gilardenghi, 60% of the market is in the hands of the telephone operators, while 40% of the equipment is sold through retailers and ecommerce pages.
As for the "war" of brands, iProUP exclusively accessed the ranking with the main players in the sector. And the first thing that is observed is that Samsung also in this area suffered a significant drop in the amount of equipment shipped to the Argentine market. In total, it sent 1.6 million units for sale, compared to more than 2.7 million phones in the same period of the previous year (38% collapse).
The level of collapse was such that Samsung's poor performance explained 86% of the fall suffered by the category during the first half.
In parallel, among the brands that won the most ground are Alcatel and Nokia, which were in fourth and fifth place, respectively, and which exhibited rates of more than 300%.
Nokia's resurgence - which for years was almost missing from the local market - came after the license passed to the Finnish company HMD Global, which decided to relaunch it in 2016.
Last year, this firm reached an agreement with Solnik, which has a plant in Tierra del Fuego, and in December it began assembling the first teams with its logo.
In that same plant another brand is produced that previously did not appear in the records and that began to escalate little by little: Xiaomi, which is currently in a modest ninth place in Argentina.
However, it promises to make more noise considering that it is the fourth largest global smartphone manufacturer, with a share of almost 9%.
Regarding the evolution of the business, although Gilardenghi avoided making forecasts, he did find it difficult to expect a jump in sales in the short term.
In fact, the Fuegian manufacturers waited until a few weeks ago, to close 2019 with a production of 7.5 million phones, far from the record of almost 14 million reached in 2012. As in the previous case, the devaluation of the last days forces to review the projections.
Concern on the island
From the Rio Grande delegation of the UOM, they expressed concern about the low level of activity and how this came to affect employment levels.
"There were some companies that took some personnel, but the reality is that we are in crisis," said a consulted source.
The last data they have corresponds to the month of April, when only 6,153 jobs were registered. Of that total, almost 1,400 are discontinuous benefit personnel (PPD), a temporary work regime.
To understand the magnitude of the problems that the island is going through, it is enough to know that in 2014 there were more than 14,100 people employed in the electronics industry. That is to say that in less than five years almost 8,000 jobs were lost, a decrease of 56%.
In this context, the fight that is coming is for the subsistence of the plants that operate in the south of the country. The UOM warned that "there are almost no investments", not only because of the current situation, but because the regime has an expiration date: 2023.
From Tierra del Fuego they have been negotiating so that the tax and fiscal benefits extend for 50 years, until 2073. However, from the Macri Government they ratified on numerous occasions that - if they remain in power - there will be no extension.
As with the notebooks, the official plan is that a good part of the electronic devices arrive imported and ready for sale and not in the form of kits to later add value to them in the south of the country.
In fact, the macrismo imagines the island far from the business of televisions, cell phones and air conditioning equipment. Instead, he thinks of it as a pole to produce from LED traffic lights to equipment to supply homes with clean energy.