Gitex retailers hope for spark in Dubai as love affair with gadgets fades

The opening day of Gitex Shopper at the Dubai World Trade Center. A staff member of Hisense looks at high definition television screens on display at the Hisense stand. Antonie Robertson / The NationaShow more

UAE consumers’ love affair with technology may have lost some of its spark.

Big electronics retailers are forecasting another tough year ahead for sales growth as people take longer to replace their gadgetry.

Speaking at Gitex Shopper, Dubai’s twice-yearly electronics extravaganza, retailers said they expected a 10 to 15 per cent jump on sales from the event last year.

While bumper bargains are expected to drive growth over the four days of the event, the ebullience was not matched in predictions for the year ahead.

“The days when we saw 15 to 20 per cent growth in a year are gone, last year we saw 8 per cent,“ said Neelesh Bhatnagar, chief executive of Emax, one of the largest electronic retailers in the Middle East. He said consumers are still spending because there are new products available, but the renewal cycles are getting longer as the technology in smartphones becomes increasingly similar.

“Even with TV panels, the youth increasingly watch on laptops and phones. But many parents will have a panel in every room as the prices of them fall – so even as a sector shrinks there is still some growth.”

The slim profit margins on electronic goods are further eating into retailers’ bottom line, meaning business growth has to come from developing other revenue streams and driving custom through other channels such as online.

“Margins are almost non-existent” said Nadeem Khanzadah, head of omnichannel retail for Jumbo Electronics.“ We were up 10 per cent last year and we will be happy to match that again this year.

He said Jumbo is focusing on extended warranties and other value added services such as its “Unwired Crew”.

“We will buy your old phone off you for a fair price if you buy in our store. We will take all the data and whatever was in the cloud and bring it all to your new phone. So you can walk out with a brand new phone with all your personal records and settings already loaded. It has been so successful we are now trialling it with domestic services.”

The growth in online transactions has also opened another avenue for increased sales.

“Our sales grew by 15 per cent in 2015, we had 1 million people a month use our mobile app,” said Pankaj Kumar, vice president of Sharaf DG. “We also had 1 million people in our stores every month. We find that people browse through our online channels and come into the store to enjoy the products.

“We are transparent about prices across the country, so there are no surprises. We only transact maybe 3 to 4 per cent online, so the bulk of sales are in shop. We will be opening another two shops in Dubai and Abu Dhabi this year, but only forecast 10 per cent growth for 2016.”