Growth time: what will happen to the prices of electronics and home appliances in 2022

Victoria Pavlova

Cars, as Novye Izvestia recently found out, have risen in price by 25-50 percent over the year and will soon become completely unaffordable. In the meantime, the Russians, having had enough of super-expensive cars, have switched to household appliances: demand is breaking all records. A similar situation was at the end of 2014, when computers and TVs were taken out of stores in batches. As it turned out later - unnecessary for many. A large part of the equipment bought on the wave of excitement was then put up for sale on various private bulletin boards. 2022 can also be rich in offers of almost new technology.

Analytics from Aliexpress Russia shows that in the wake of anticipation of new covid anti-records and lockdowns in January 2022, sales of household appliances increased by 3.4 times compared to January 2021. Washing machines are especially popular - the demand for them has grown 5 times. Refrigerators and ovens are not far behind either. Increased interest in large household appliances is also noted in Citylink. Small household appliances (meat grinders, multicookers, etc.) began to sell 1.4 times better. Ozon notes an increase in electronics sales in January by 3.3 times compared to the same period last year (smartphones are sold out 4.5 times more actively). People in January, according to Wildberries, bought 2.7 times more laptops.

On the one hand, such excitement, fueled by US threats to ban the supply of products with components developed in the United States to Russia, creates excellent ground for rising prices. On the other hand, an ordinary person does not need to have 5 smartphones in all pockets, 3 laptops and 2 washing machines in one apartment.

Mobile Research Group analyst Eldar Murtazin reassures: there is no need to be afraid of a ban on the supply of equipment to Russia.

- America very often uses the language of threats, but these threats are almost never implemented. Therefore, the prospect of banning smartphones and other electronics in Russia is most likely imaginary. The likelihood of such a development of events is extremely small. Because if such a ban happens, nobody will care. Then the likelihood of a full-scale war will worry. At the moment, such sanctions mean direct undisguised aggression, they usually follow in a matter of weeks, not even months, before a full-scale war.

In addition, according to Eldar Murtazin, there is some hope for the possibility of local production. At least in the future.

- The production of household appliances depends on the category of goods - many goods are already produced in Russia, for example, televisions, washing machines, and so on. If we talk about import substitution in terms of smartphones and computers, of course, these are not short-term prospects, not the next 5 years. But the current development of this area gives hope that in 10-15 years we will provide ourselves with electronics by 30-40 percent on our own. Now it is from the strength of 5%.

There is hope, but for most people choosing a new computer or dishwasher, 10-15 years is too long. Nobody will wait that long. In addition, as Denis Kuskov, CEO of the Telecom Daily agency, notes, import substitution does not yet affect the consumer sector:

- Import substitution in Russia, of course, is developing, but not at the level of such devices. It works mainly on devices of the non-consumer segment, and in the mass segment we have practically nothing of our own. It can be said that the consumer market in the Russian Federation will suffer from sanctions and bans, if they are nevertheless implemented.

In the meantime, our government will try to do everything to make equipment more and more expensive. On March 1, a pilot project will be launched to label mobile phones, smartphones, laptops, tablets, e-books, camcorders and printed circuit boards. "Honest sign" should help fight counterfeiting, but will make equipment more expensive. First, manufacturers, suppliers and retailers will have to spend money on equipment that applies, puts into circulation and reads the marking. Secondly, the marking will hit the gray market: it will no longer be possible to save money on buying a smartphone brought into the country in a dubious way without paying duties, or even more so “refurbished”. Thirdly, after the completion of the experiment on January 1, 2023, the Ministry of Industry and Trade intends to introduce a recycling fee on electronics, for which entrepreneurs are starting to prepare now. Domestic producers will receive compensation for the salvage fee, but since there are no domestic producers, there is no one to return the money to.

The production of electronics itself, wherever it is located, is also becoming more expensive. The growth graph of lithium, which is used in the production of batteries, is similar to the graph of the incidence of Omicron - the same sharp rise. Since the beginning of 2021, lithium has risen in price by 8.2 times. Even bitcoin can envy such an explosive growth in quotes. Also, the largest chip makers AMD, Intel and NVIDIA are preparing for the increase in production costs. They all order chips from Taiwanese company TSMC, which has already increased its prices by 10-20%, regardless of whether old or new technologies are used.

From this, Eldar Murtazin’s forecast for 2022 is disappointing: everything will rise in price in stores.

- The basic scenario is this: prices will increase by at least 30% for everything. Most likely, computers and laptops will rise in price to a greater extent. TVs - to a lesser extent, smartphones - 30%. In the near future we will see an increase in the price of everything where there is a more or less noticeable amount of batteries, batteries and the like - there the price increase will also be noticeable.

These are the harsh realities of the market economy: when there is a shortage of products (iPhone supplies are 70-80% lower than the market needs, Samsung, Xiaomi, Huawei and game console manufacturers also have problems due to a shortage of components), and people are ready to pay any money, only not to be late, prices will rise. 2022 still has room to update price tags.

If earlier there was hope that the unprecedented rise in prices for almost all durable goods is a temporary clouding of sellers, now it is clear that it will not be cheaper for sure. We must get used to living in a new reality and not provoke a further rise in prices with rush demand. If there is an urgent need for equipment, then it is better not to postpone the purchase.

But acquiring for the future is a dubious undertaking. All the same, electronics are rapidly becoming obsolete and out of fashion, and there is no guarantee that smartphones, TVs and washing machines will be resold at a profit in a saturated secondary market.