Dubai: Major electronics retailers spent about Dh5 million each to participate in the Gitex Shopper Spring, raising concerns about whether it will be profitable — especially as Dubai’s retail scene becomes busy with promotional events.

Following the Gitex edition in October, the consumer electronics show in April also falls between the Dubai Shopping Festival (DSF) and Dubai Summer Surprises (DSS), so how financially feasible is another electronics event for retailers spending millions on promotions?

“It’s definitely a very tough balancing act, not just for Gitex but also for DSF and DSS events in which we make a lot of investments. The point is to get the interest of consumers,” said Nadeem Khanzadah, general manager head of retail at Jumbo Electronics.

Some retailers believe they will break-even at the event and others are hoping for a marginal profit.

“If it’s a good event, if there are good offers, we sold a good quantity, and we up not losing money then good. We are targeting to break-even. If it’s about making profit, the offers are diluted and consumer interest wanes,” said Khanzadah.

The biggest cost for retailers at Gitex is the cost of the bundle offers, they say.

Jumbo Electronics and Emax spend a total of Dh5 million to be at Gitex, including the cost of infrastructure, rent, bundle offers and marketing, they told Gulf News.

“It’s worthwhile because the same consumers would shop at our stores throughout the year,” Khanzadah said.

Sharaf DG said it expects to make 50 per cent less in sales this year compared to October because the show days are less.

“We’ll see how viable it is,” said Yaser Sharaf, managing director of Sharaf DG.

Rents

Retailers said that lease rates per square metre at the exhibition space were down by 20 to 30 per cent during this four-day event compared to the eight-day show in October — which was necessary to attract the same level of participation.

Some retailers believe the event is financially feasible because it attracts footfall and keeps electronic goods on the mind of consumers.

“It’s not a problem, it’s self-funded. We generate volumes and pay for the cost. It is financially feasible to be here twice. We’re not here to lose money, we expect marginal profits,” said Neelesh Bhatnagar, chief executive of Emax, adding that they spent Dh5 million to be at Gitex this year.

A Spring edition of Gitex makes sense because the product lifecycle is very fast as new technology constantly enters the market, retailers said.

“There are new product releases throughout the year. It’s unrealistic to wait until October to show them. So now is a good time,” said Ashish Panjabi, chief operating officer of Jacky’s Electronics. “Now the school holidays are on and the Saudi and Indian tourists are here.”

He expects to ring up one month worth of sales during the four days of Gitex and double the number of sales this April compared to the same month last year.

Bundle offers are usually a minimum of 10 per cent the product value in addition to discounts, he said.

So, is another electronics show sustainable?

“As long as the rate of innovation is high, then it will be,” Panjabi said.

Dubai World Trade Centre, the event organisers, said they provided more facilities to attract retailers in April.

This included “stronger marketing” with daily car giveaways, reducing the entrance fee from Dh30 to Dh15 and building the stands for some exhibitors, said Hemesh Chandavarkar, exhibitions director of consumer cluster at DWTC.