Automatic Appliances Inc. president Samie Lim announced his company is going to start penetrating the Mindanao market as they are set to open a store in Cagayan de Oro in three weeks time . He noted that this is the best time to open stores in malls because owners are giving lower rates in order to keep their stalls occupied.
He noted tant consumers are still buying appliances despite the economic crisis but their purchases have shifted to cheaper brands and more cost-efficient products, Samie Lim said.
“The sales in terms of peso sales went down in the last six months but if you look at the quantity, it has been increasing steadily,” Lim told reporters.
He said there is still a market for appliances but the purchasing pattern has switched from luxury items to more cost- efficient ones.
“For example, sales of plasma TV have gone down. As a result, prices have likewise dropped,” he noted. He said while sales of plasma TV dropped by almost 40 percent, other items are still being bought.
Lim explained that this is a result of the construction boom over the past years. He said people still need to furnish the condominiums and houses they bought during the time when the economy was doing better.
“The market penetration is still going up. The need is still there,” he said.
However, he said people are valuing their money more nowadays and will not easily spend on luxurious items when a cheaper alternative is available. “Instead of buying what they really want, they are becoming more cost conscious.”
Lim admitted that this has affected their bottom line but he said the drop has not been significant because the appliance industry is not too dependent on the export industry.
As a result of the increased demand, Lim said they are considering opening more stores either this year or next year depending on when they can complete the project. He said the plan is to construct four more stores this year.
“We want to open a new store every quarter,” Lim said. The new stores are expected to be built in Central Luzon and Northern Luzon.
This could mean a P200 million investment for the company. Lim said each store requires a capital of P20 million to P50 million depending on the size. The flagship Automatic Center has 40 stores nationwide and has opened four last year.