The retail sector experienced a quicker recovery than other sectors as it wasn’t hit as hard as expected, observed Mahesh Wijewardene – the CEO of Singer (Sri Lanka) – as he assessed the impact of the pandemic.

“This is largely a reflection of the consumer durable goods segments where they are considered to be essential to day-to-day living rather than luxuries,” he explained, noting that pent up demand during the curfew led to sales in subsequent months.

As for changes in consumer demand, he stated: “We noticed that needs and priorities changed during this period, which transformed into emerging trends given the shift in people working from home and children learning online.”

Furthermore, he pointed out that a new dimension was introduced to the local consumer durables sector as many people engaged in digital transactions, increasing demand for items such as mobile phones, tablets and laptops: “They could be seen as essentials now as households with children need laptops for online learning.”

Additionally, the demand for products such as kitchen appliances increased as more family members engaged in cooking or experimenting with new recipes, leading to more people preparing meals at home.

“People are becoming accustomed to buying online due to restrictions on visiting retail outlets and travelling,” he added.

In Wijewardene’s opinion, the retail sector performed well during the first half of the year with businesses taking measures to reduce waste and improve cost efficiencies, helping improve bottom lines in the prevailing situation.

Expressing his views on the country’s import restrictions, he mentioned that while they impacted what businesses could sell, there was a national need for such measures. However, the consumer durables sector was able to lobby the government to lift restrictions on items needed for daily living through the provision of supplier credit to reduce the pressure on outflows.

“If the government is looking to promote more locally produced goods, this cannot be achieved through immediate restrictions as companies need time to prepare,” Wijewardene asserted, estimating that a minimum of a year and a half would be needed to review investments.

Such restrictions may have a broader impact on Sri Lanka, which is looking to attract tourists who will spend more on high end or luxury products with Wijewardene stressing that “we must have a global outlook as people may not want to purchase only Sri Lankan products.”

Elaborating on the need for local investments, he explained that the country has lacked consistent policies to support the expansion of its export basket, which has served to discourage investors.

Moreover, achieving economies of scale in a market as small as Sri Lanka is challenging, leading to difficulties in competing with larger nations such as India, China, Turkey and the US. Apart from these matters, Wijewardene highlighted the competitiveness of Sri Lanka’s products as a challenge to export growth due to protectionism policies such as duties and taxes.

Commenting on the future of the retail sector, he explained that despite the adverse environment here and the world over the last 12-18 months, it continues to have potential for growth.

“The sector serves as a facilitator so that people can improve their living standards,” he said, continuing: “As people aspire to live better, the need for products such as rice cookers and refrigerators will remain.”

In addition, there is scope to improve the penetration of such items: “While TV penetration is estimated to be more than 90 percent, the refrigerator market is about 60 percent while washing machines is 30 percent and air conditioners is less than five percent,” Wijewardene revealed.

And he concluded: “Products are also replaced at a more rapid pace so equipment upgrades along with evolving needs means the outlook for the sector in the short and long terms remains positive.”