iPhone 13
Will UAE's retail stores and ecommerce portals have enough of them during Black Friday and December peak buying season? Chip shortages are having a telling impact on gadgets. Image Credit: Supplied

Dubai: Will UAE’s tech shoppers have enough gadget stocks to pick and choose in the coming weeks? Or should they be placing their orders now and hope the latest gadget arrives without too much of a delay?

UAE’s consumer tech market is starting to feel the first signs of shortages on in-demand products, brought on by the continued global supply crisis on semiconductor chips, which are at the heart of all gadgets. Retailers – online and offline – are placing bulk orders well in advance of the peak buying in November, timed for the ‘Black Friday’ and ‘Cyber Monday’ promotions, as well as during the best part of December.

But there are many in the retail business who are unsure whether enough stocks will be ready – even when they have placed orders well in advance. So, whether it’s the iPhone 13 or even the latest TV model, chances are there could be some delay in getting them over. And some of the products could be pricier too.

Yes, chip shortage has hit key consumer products, especially mobile, TV and [the wider] IT category,” said Mohammad Badri, Director of Eros Group, one of the biggest names in the tech distribution and retail business. “There has also been some effect on home appliances as almost all products use chips.

"A 100 per cent stability is still not seen on supplies - we foresee this will continue till mid next year. Hopefully, by then, supplies should stabilise."

Another COVID-19 fallout

As with anything that happened last year, the chip shortages impacting global tech and consumer markets have to do with the pandemic shutdowns. It brought the chip factories to a halt, immediately creating shortfalls on the supply side. Even when the plants went back into operations, the supply situation did not have an immediate improvement.

Stock - Alex Tchablakian of LetsTango.com
Alex Tchablakian of LetsTango.com: "It is evident there are bottlenecks affecting movements in global trade, and I do not think this will be rectified within this year..." Image Credit: Clint Egbert/Gulf News

“The problem is very real - the processor chip is being utilized in almost all electronic production, and the supply chain has taken a serious hit,” said Alex Tchablakian of LetsTango.com, a tech and gaming focussed e-tailer. “It is no surprise that Apple has announced that they had to make a cut in iPhone 13 production as a result of this.

“The situation could worsen as supply sources are very limited. There are only a handful of major suppliers of these processing chips and mostly in Asia.”

Tech’s a winner
Call it ‘revenge shopping’ or anything else – but the last quarter of 2020 was exceptional for the UAE retail sector. And tech and electronics were prominent winners.

“Yes, 2020 was a breakout year for tech - the sales in the last quarter had risen more than 80%,” said Sandeep Ganediwalla, Partner at RedSeer, the retail consultancy. “It was because of muted sales in the first-half of 2020, which resulted in pent-up demand release during the holiday season. Also, work/study from home had ramped up electronics sales, specifically in laptop/tablet, computer accessories and gaming categories.”

This year, tech-related sales in the UAE have been spread throughout the year, with physical stores recording “significant increases. Online channels continue to see double-digit growth on gadgets – and keep in mind that’s on an already high base from 2020.

“Consumers are looking beyond discounts and prefer better experience in terms of delivery, product availability and offer variety,” said Ganediwalla. “.Such behaviour can result in higher consumer loyalty for retailers and brands in the long run.”

Don’t wait to buy

Tchablakian has a succinct answer on how consumers in the UAE – or for that matter anywhere else – should tackle this issue. Order now, is what he has to say.

“A bit of heads up to customers - if you are thinking about gifts of the latest electronics this holiday season, keep a lookout from now if the products are available close to their retail price. The stock situation is very unpredictable.

“I would not even advise waiting for Black/White/ or even our Orange Friday weekend. While we will have exclusive and slashed deals, they will be for other categories, or previous-gen models. The latest electronic products will most likely not be discounted - in fact I predict that they would face a price spike on that period.”

We have a long-term and accurate forecasting system in place that takes into account historical sales trends, seasonality, lead-time changes and promotion plans of the brand. We have secured good stocks for the holiday season

- Mohammad Badri of Eros Group

Pay more?

Other retailers too echo the sentiment about consumers having to pay a higher price on the best-moving products. Would retailer consider sourcing from all possible sources, including outside of official channels?

According to Badri, “We are the authorized distribution and retail partners to major reputable brands and we source only directly from our partners who are manufacturers. We do not have any buying from the open market due to our long-term forecasting.”

Online vendors however are not bound by the same code, and they will be on the lookout for all possible options to ensure they have enough supplies in hand. “Being in the UAE has its advantage as a trading hub, which means that vendors and resellers have a lot of availability on different region models and can pick and choose the best prices,” said Tchablakian.

UAE consumers will be hoping for the same – about getting the ‘best prices” for themselves.