UAE consumer electronics market to grow 3% to $11.8b

Low unit prices will drive volume growth to 10% this year

  • People during the Gitex Shopper.Image Credit: Atiq-ur-Rehman/Gulf News
  • Bargain hunters on the first day of the 26th edition of Gitex Shopper Autumn 2016.Image Credit: Zarina Fernandes/ Gulf News
Gulf News

Dubai: The consumer electronics industry in the UAE is expected to grow by around three per cent this year to $11.8 billion compared to $11.5 billion last year, driven mainly by smart wearable devices and convertible laptops, an industry expert told Gulf News.

“2015 saw a strong retail volume growth in consumer electronics in the UAE. Consumers are increasingly seeking compact and multifunctional products like smartphones and tablets that are offering internet connectivity,” said Ahmad Bakr, research analyst at Euromonitor International Middle East.

He said the growth in sales of smartphones and tablets has hit sales of imaging products and desktop computers.

But retailers are seeing a strong growth in laptops due to better margins compared to smartphones, which are falling day by day.

Even though both Samsung Galaxy Note 7 and iPhone 7 devices are available at the stands, the shortages of iPhones are causing concerns for the retailers.

Nadeem Khanzadah, head of omnichannel retail at Jumbo Group, said that only a few people are taking a refund for Samsung Note 7 despite its recent battery issues. Many want a Note 7 and are waiting for the replacement.

“It is not that all the people are going for only Samsung or Apple. There are segments for Huawei and Sony too,” he said.

Bakr said that the volume growth in consumer electronics has increased to nearly 10 per cent this year compared to value growth of around three per cent due to declining product prices.

Despite a slight fall in consumer confidence, he said that consumers are still buying consumer electronics due to weak prices and increasing per capita income.

The fastest growing categories are the convertible laptops and smart wearable devices, both growing from a low base, followed by tablets.

He said that portable consumer electronics (imaging devices, mobile phones, wearable devices), which translates to bigger volume, to hold 58 per cent share. Out of the 58 per cent, mobile phone sales hold 65 per cent.

The next biggest volume driver is computers and peripherals (monitors and printers) at 27 per cent, followed by home audio and cinema (in-home entertainment) at 12.4 per cent while the dying in-car segment (navigation systems, in-car speakers) at 1.6 per cent.

Another industry expert said that the UAE retail industry is dependent on major shopping events to boost sales. Sales get a boost only if new products are available.