BSH UK chief executive Gunjan Srivastava has spoken out on the company’s decision to sell direct to consumers, the supply problems created by Covid and how he believes “it has all calmed down”.
Addressing the issue of the supply problems created during the Covid pandemic, the BSH CEO said in an interview in the latest issue of electrical retailers association Retra’s Alert magazine: “That kind of demand surge wasn’t anticipated by the industry. Factories and facilities were also shut down during lockdown, which resulted in us not being able to cope with the demand surge that happened, and, before that could settle down, we ran into a shortage of chipsets and semiconductors, which further amplified the backorder situation.
“Some of the waiting lists were getting up to six months or more. It took time to fix it – at least six months. But now sell-in/sell-out are more or less in tandem. It’s all calmed down – the current demand is the current sell-in.”
During the interview, Srivastava also responded to the question of how BSH justifies selling direct to consumers. He said: “Our intention is not to be a retailer, but our entire go-to-market approach is to be where the consumers are. The majority of MDA purchases are bought off-line still, but a good nine to 10% [of consumers] are buying them directly from the manufacturers. We need to be present there, otherwise we’d miss that part of the market completely. We aren’t the first ones opening up this route to market – I think we’re probably one of the last.
“More importantly, we’re not doing anything disruptive when we’re directly accessing the consumer who is out there looking for an exclusive environment. From a pricing or stock perspective, we’re treating our direct-to-consumer channel the same as any other retail channel we have. There is no favourable treatment.”
Srivastava added that BSH has been very transparent about its B2C decision and that it will continue to proactively provide information to its retailers.
Giving his predictions for the future of the MDA market, he said that after the bumper year created by the Covid pandemic, BSH saw a decline in 2022 that has continued into 2023. He said they saw the market down by almost 6% by value year on year and by around 11% in volume.
“The collective estimate,” he told Retra Alert, “is that the market will remain similar for the remaining months of the year and isn’t likely to bounce back until the second half of next year.”
Read the full interview, in the latest issue of Retra Alert magazine.