Indian PC market to face the heat wave due to China lockdowns

Widespread lockdowns were imposed to prevent the spread of omicron-variant outbreaks. Both manufacturing and nonmanufacturing gauges released by the National Bureau of Statistics tumbled into contractionary territory in March. As China takes a strong stance on its Zero-Covid policy, implementing lockdowns in major manufacturing hubs, supply disruptions in PC market will occur. The official manufacturing PMI fell below the 50 mark, which separates activity expansion from contraction, after four months of activity expansion. Lockdowns have also suspended work at electronics factories in the south and a wide variety of industrial companies in central China.

India’s biggest supplier of intermediate goods, has revived fears of potential disruptions in the availability of key raw materials and intermediate goods. In some sectors, especially electronics, up to 25% of production could get hit in the short term, some of them said, cautioning that exports of various products, too, will be adversely impacted. Many Chinese manufacturing hubs, including Shenzhen, Shanghai and Changchun, implemented widespread lockdowns this month as daily COVID-19 infections rose to their highest levels since the initial outbreak in the central Chinese city of Wuhan in early 2020.

The widespread lockdowns and quarantine measures also made manufacturers short-staffed while lengthening their delivery time.

Stronger demand is expected from SMBs and enterprise customers, as the number of Covid-19 cases falls, vaccination rates surge, and businesses and schools return to normal. China’s Covid lockdowns are putting the economy under strain and threatening to disrupt global supply chains, prompting Beijing to call for more contingency plans to deal with the risks. The emergence of the highly transmissible omicron variant has made controlling outbreaks harder and increased uncertainty for business operations.

Local governments across China have attributed the latest wave of cases to the omicron subvariant BA.2. Economists warn the situation could worsen in April, denting growth for the second quarter as uncertainty grows about the scope, severity and length of China’s lockdowns. With this there will be supply disruptions in the PC market and India is again expected to get the short end of the stick. India's PC market grew 45 per cent in 2021, with shipments of desktops, notebooks and tablets reaching 18.6 million units. While 2021 saw a huge jump in shipments, the same is not expected of 2022 in India.

However, Analysts believe that firms would be able to manage the disruptions. "Such lockdowns have happened before, and cities have re-opened within a short period of time once the number of Covid cases were within control.