South Africa’s national lockdown and the general effects of the COVID-19 pandemic have played havoc with the local economy.
Notwithstanding the jobs and income lost due to the closure of public venues, limited operations of restaurants and other businesses, and the country’s extended prohibition, South Africans have felt the effects of the pandemic on the prices of their purchases.
The poor performance of the South African rand against the US dollar over the course of the year coupled with restricted imports and supply has resulted in price increases across many industries.
This effect is especially notable among technology products, the price of which is more dependent on the rand-dollar exchange rate than it is in other sectors.
It is prevalent to a lesser degree across even high-volume industries such as general produce, however, with a recent report finding that the price of basic groceries had increased substantially over the lockdown period.
Technology prices have been particularly hard-hit by the weak rand, as indicated by local distributors earlier this year.
At the start of 2020, the South African rand was trading at just under R14 to the dollar. At the time of writing, it is trading at just over R17 to the dollar.
This fluctuation and decline have had a substantial impact on the prices of imported goods, including items such as PC components, laptops, tablets, smartphones, and other gadgets.
These factors have led to an outcome where the price of PC hardware is now substantially more expensive than it was prior to the COVID-19 pandemic.
We compared pricing from before the national lockdown with current technology prices to determine how much more expensive these products have become.
We used historical pricing information from local online retailers that were listed in February 2020 as the baseline for our comparison.
The national lockdown was implemented at the end of March 2020, meaning these prices should provide a relatively accurate idea of how much prices have risen during the lockdown.
We compared this historical pricing with the prices of the same products listed on the same online stores at the time of writing.
In all cases, we noted a significant increase in pricing for PC hardware produces.
The results of this comparison are shown in the table below.
|Component||February 2020||August 2020||Change|
|Palit GeForce RTX 2060 OC Dual||R5,699||R6,599||+16%|
|AOC 27-inch CQ27G2 Monitor||R6,499||R7,999||+23%|
|Razer Kraken Wired Gaming Headset||R1,299||R1,999||+54%|
|AMD Ryzen 9 3900X||R8,999||R9,999||+11%|
|Logitech MX Master 2S Mouse||R999||R1,699||+70%|
|WD Blue 500GB SSD||R1,099||R1,399||+27%|
Why PC hardware prices have increased
To find out more about the various factors that resulted in these prices increases since February 2020, MyBroadband spoke to online retailers Wootware and Raru, both of which offer a wide selection of PC hardware.
Wootware founder Rory Magee told MyBroadband that most PC hardware pricing has remained stable in US dollar terms, but local prices have increased due to a number of factors.
“The exchange rate has fluctuated between R15 to the USD at the beginning of Feb, to around R17.25 to the USD today,” Magee said.
“Airfreight has become more expensive though since February due to lockdown measures since the number and variety of airfreight options have been reduced substantially to South Africa.”
“Much airfreight would usually be sent on passenger airlines, though these airlines are largely operating at single-digit percentages of their regular capacity worldwide,” he said.
He said that cargo-only carriers have had to pick up the slack, which has resulted in higher pricing and some unanticipated delays as they have had a surge in volume.
Wootware anticipates a steady reduction in airfreight rates once regular international air travel resumes and steadily increases in volume.
When it comes to products that were affected by these price changes, Magee said fast-moving products were the most impacted.
“While there are some short-term price head-winds and adjustments as a direct result of the current global situation, 2020 is a significant year for advancements in PC hardware,” he said.
“Expected new processor and graphics card launches in Q3 and Q4 of this year should provide users with new heights of performance and will result in better value for consumers throughout the respective product ranges.”
Wootware has seen a significant increase in demand for computer hardware, which has impacted its overall range of offerings that are available at any given time.
“We made the decision to limit our catalogue to mostly items that we could keep in stock in relative bulk quantities in order to make sure that we could dispatch all orders as quickly as possible and to try to focus on making the best value offerings available to our customers.”
“This has also been necessary in order to keep our service levels high while dealing with an increased volume of orders and enquiries,” he said.
Raru founder Neil Smith told Mybroadband that electronics stock availability globally has been adversely affected by the impact of COVID-19, which has also had an impact on pricing.
“The limited availability of space on flights to South Africa has also caused the freight costs to rise as companies have to fight it out to get their items into the country,” he said.
“Until international flights resume to normal pre-COVID-19 levels, this will be a continuing extra cost factor as the rules of supply and demand dictate pricing.”
He added that the sudden change to a work-from-home environment has also increased the demand globally on notebooks and peripherals, especially headsets and webcams.
“Another badly affected segment is power supplies. China manufactures almost all the world’s power supplies and there has been limited to no output for months now,” he said.
“High-end PSUs are especially badly affected as stock is only expected towards the end of 2020/early 2021.”
These factors will have an impact on pricing and stock for the foreseeable future, Smith said.