Dubai: Dubai-based consumer electronics retailer Eros Group is expanding its brand portfolio in a bid to achieve its target of Dh5 billion in revenues this year.
The company reached Dh4.5 billion last year and sees a flat consumer electronics market this year due to a fall in tourists from Russia and China.
The retailer has become the distributor for Chinese home appliances maker Midea in the UAE, Oman, Qatar and Bahrain.
Deepak Babani, CEO, Eros Group, told Gulf News there were segments in Midea which were not represented by the group such as fans, water coolers and microwave ovens.
“Fans are a sizeable business of around 50,000 units and around 140,000 of water coolers per year in the UAE. No major brands are present in these segments,” he said.
Eros’ share in front-loading washing machines is still less than one per cent, he said, adding about 40 per cent of the home appliances market is dominated by European brands, followed by LG, Samsung and other brands.
“I am not aiming at big volumes right from the day one as acceptability comes very slow. This brand will become a major player in the coming years in the appliances industry,” he said.
Midea was present in the regional market for many years and the company makes 60 per cent of the fans, microwave ovens and rice cookers for many top brands.
Justin Lu, head of business development at Midea, said no other brand had the entire line-up of home appliances.
Midea products registered 12 per cent growth in revenues while, combined with other OEM brands, the company registered over 25 per cent growth in the Gulf.
“This year, the market and consumer sentiment is not optimistic, so people will be looking to buy products for cheaper prices and that will provide a growth opportunity for us. This year also we expect the growth to be same as last year” Lu said.
Established in 1968, the company achieved a 20 per cent year-on-year growth in global revenues to $21.3 billion in 2015 and $140 million from the Middle East. The biggest market is Iran, followed by Saudi Arabia and the UAE.
Babani said the home appliances industry is currently very stable, growing on average at 5 per cent but once internet of things or interconnecting appliances to the internet concept gains traction, then the need to change appliances will grow higher. Then the growth will move to around 20 per cent.
The internet of things is not “far away”, it will happen by the end of next year, he said.
Regarding expansion, he said Eros will open a showroom only if there is a clear cut merit of going to Iran, otherwise the company will operate from Dubai.
“Iran is on and off at the moment as it hasn’t opened the way we wanted and due to high currency risks. If Iran comes into the picture, it will icing on the cake. We expect situations to improve from July. If Iran does not open up, we expect the same revenues as last year,” he said.
“As a group, our aspiration is to grow between 20 and 25 per cent but it is not happening, so we have appointed one strategic consultant to look into the DNA of Eros and to recommend us which kind of industries we should enter. That will be out in the next two months and that will give the direction for the next five years,” he added.
