Dubai: Retailers participating at Gitex Shopper will be able to pass on more benefits to shoppers, in the form of bundle offers and promotions, after the Dubai World Trade Centre lowered its floor rates this year.
According to Mahesh Chotrani, assistant vice-president of Jacky’s Electronics, fixed costs — rentals and the cost of fixing up exhibition stalls — had come down by 40 per cent.
“When the cost of doing Gitex is reasonable, then there is more money left for good prices and offers, and consumers will definitely benefit,” Chotrani told Gulf News.
“Now, the fixed cost is reasonable and [the] DWTC has come forward and extended their hands and said that the consumer sentiment is weak. So, they have reduced the cost and now there is more disposable money to be put into offers and prices.”
Chotrani, who was quoted earlier lamenting the rising cost of setting up at the trade show, said he expected this year’s Gitex Shopper, which will run for five days, to do well.
For Avinash Shanbhogue, the DWTC’s portfolio director for exhibitions and events management, the cost reduction was in keeping with the reduced number of shopping days.
Despite all this, the total cost of operations for electronics retailers has gone up by 20 per cent to 30 per cent, an unpleasant situation given that net profits are expected to remain in negative territory this year, according to Eros vice-chairman Deepak Babani as he quoted a private audit firm’s report.
“Normally, the net profit used to be between 2-3 per cent. This is because the top-line [revenue] is getting impacted,” Babani said.
Some hypermarkets in the UAE have resorted to holding their own versions of the promotion during the same time to boost electronics sales.
Ashish Panjabi, COO at Jacky’s Business Solutions, hailed the DWTC’s move to reduce floor rates, saying it would keep the event running and help both consumers and retailers.
“It is a substantial amount of business that happens at the [Gitex] Shopper,” he said. He added that the rebalancing of any economy during challenging conditions is always positive.
“Whether it is an event like this or a shopping mall operator, when the times are good we share the profits but when it is challenging, we need to adjust. That understanding [and] collaboration between partners in the long term is one of the reasons you see changes like these,” he said.
Nilesh Khalkho, CEO of Sharaf DG, said that the move was definitely good for the consumer electronics industry because the market was experiencing some degree of softness this year — something that had seen retailers shying away from the April Shopper.
Khalkho said January had been the worst hit due to the introduction of value-added tax (VAT), but noted that the reduction in growth had eased as the months passed by.
This time, the lower costs could consumers could benefit from good promotions.
“If we give it to the real estate, then there is no money, in the form of offers and promotions, to give to customers,” he said.