UAE electronics market to witness boom time

Dubai: Demand for UAE's domestic consumer electronics market is expected to increase strongly in 2010 despite a resilent 2009, according to the latest Business Monitor International report.

The value of the UAE's domestic consumer electronics market is expected to touch $3.9 billion (Dh14.3 billion) by 2013 due to increased demand driven by the popularity of 3G mobile handsets, smartphones, notebooks, big screen LCDs and other new devices, the report said.

The report said that export demand from the GCC countries and India is expected to help mitigate any adverse impact of a slowdown in the UW export market.

Spotlight

The report puts the spotlight on the UAE's geographical position as the country is a major electronics trading hub, re-exporting consumer electronic items to the Gulf, South Asia, the Commonwealth of Independent States (CIS) and Africa.

Dubai is a major trading centre accounting for 80 per cent of the UAE's electronics exports and 85 per cent of re-exports.

Hamad Bu Amim, director-general of the Dubai Chamber of Commrce and Industry, said the electronics market has seen recent exponential growth as he cited the example of the setting up of The Electronics Group which joined the ranks of the large number of business groups, including the Computer Business Group, operating under the auspices of the Chamber.

Bu Amim said Dubai's organising of large electronic exhibitions like Gitex not only provides an impetus to the electronics market but reaffirms the emirate's position as an electronics investment hub in the region as the various Government initiatives promote the UAE as a preferred business destination.

Click here to read special coverage of Gitex

Half the price of laptop

Ashish Panjabi, chief operating officer for Jacky's Electronics, said the emirate's consumer electronics market is bouncing back due to the strong intake of notebooks and LCD TVs.

Ashish said that many customers are buying LCD TVs as the prices have dropped by 30 per cent and the price of a 32-inch LCD TV has become half the price of a laptop. The demand for the 32-inch LCD is robust.

In the smartphones segment, he said strong demand for BlackBerry phones, which has sold around 200,000, will lead to further penetration of the smartphone segment in the UAE followed by the iPhone.

According to the BMI report, the global recession is likely to have an impact on UAE exports of consumer electronics in 2009.

However, exports to fast-growing markets such as the GCC countries and India could help mitigate the adverse impact of the global downturn on UAE exports of consumer electronic goods.

Shift in behaviour

The report says the UAE consumer electronics market has been boosted by excellent telecommunications and IT infrastructure. Local market demand has become more important than the re-export trade in recent years.

Therefore, the domestic consumer electronic devices market, defined as including computers, mobile handsets and video and audio gaming products, was estimated to be valued at $2.9 billion in 2008.

"At Jacky's we have seen a shift in the purchasing behaviour of our customers from high-end products towards fast-moving products. There is steady demand for mobile phones, particularly those with high megapixel cameras, and an increase in sales of digital SLR cameras," said Jimmy Patel, General Manager of Jacky's Electronics.

Ashish expects modest growth in the consumer electronics industry next year. "Challenges faced by the UAE consumer electronics market, include low margins which create intense competition, the changing structure of retail outlets and competition faced by local manufacturers and assemblers from foreign imports. The retail market has seen a shift towards multi-brand electronic sections in hypermarkets and large specialist electronic stores within giant malls.

"Government policies have been a major driver for growth in the market. This is partly because low import duties and direct supplies from manufacturers have contributed to keeping prices in Dubai about 15-20 per cent lower than in other markets of the region. Projects such as Dubai Festival City and events such as Dubai Shopping Festival, consumer electronics expo and Gitex Shopper, as well as trade fairs have helped in increasing sales for vendors," the report said.