Laptop demand surges but supply can’t keep up

By Jenina P. Ibañez, Reporter

DEMAND for laptops surged during the lockdown, but a decline in global electronics manufacturing capacity caused a shortage in supply in the Philippines.

Technology company Lenovo Philippines said local demand during the lockdown reflected at least the 26% spike in its global laptop sales, a number that is based on shipment quantities. But local demand could actually have increased by more than double, Lenovo Philippines President and General Manager Michael Ngan said in an online interview.

“What we actually don’t see is kung ano ’yung hindi nag-ship. The pandemic actually affected the supply side,” he said.

ASUS Philippines, which also saw demand by June double its pre-lockdown numbers, attributed the spike to workers’ need for devices as they shifted to work-from-home operations.

Parents are also buying devices for young students as they prepare for online learning, ASUS Philippines Country Head George Su said in an online interview.

“The most significant change is that the younger grades in primary school, even the kindergarten, the parents need to consider to acquire a unit or two,” he said, adding that strong demand in their products is expected until the end of the year.

Outsourcing companies that were allowed to continue operations during the lockdown increased bulk orders of laptops for employees working from home, Mr. Ngan added.

But these electronics companies are not able to meet the increased demand, with Mr. Su saying that 30% to 40% of local demand is still underserved.

“Most of the vendors struggle to get more supply and distribute it across several markets during this situation,” he said.

Lenovo Philippines identified bottlenecks at every point of the supply chain. Mr. Ngan said there are shortages among their CPU and components providers, while their own manufacturing production is held up by restrictions declared to contain the pandemic.

“With the pandemic, everything is halved: production nangalahati (is halved) because nobody can deploy 100% workforce. In fact, not even in factories,” he said.

Mr. Ngan added the move to deploy only skeleton staff at the Customs bureau and domestic flight restrictions have slowed down importation and distribution.

The tech companies have manufacturing centers globally, including China and Mexico.

ONLINE SALES
While both companies sell online, Mr. Su said that most sales still come from brick-and-mortar stores. But e-commerce also saw a surge in laptop sales during the lockdown.

Lazada Philippines said average monthly laptop sales increased by five times during the lockdown compared with monthly sales in January and February, the e-commerce company said in an e-mail. Sales of its entire electronics category doubled in this period.

Lenovo’s Mr. Ngan noted some Filipinos also sold secondhand laptops on social media. One local laptop buy-and-sell Facebook group has almost 140,000 members.

To improve their own supply, he asked the government to include computers in its list of essential goods for Customs concessions.

“I think laptops nowadays should… kung pwede can be classified as essential goods and be given some concessions in customs, in logistics, para makadaaan, para makarating siya sa mga buyers,” Mr. Ngan said, explaining that the recovery of the economy could be backed by a workforce that successfully shifts to digital operations.

The company is adjusting its demand forecasts to improve shipments of their products to the country, he said.