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GITEX 2014 EDITION CONFIRMS GROWTH OF CONSUMER ELECTRONIC SECTOR IN UAE

Gulf Information Technology Exhibition (GITEX) is the bi-annual sales and promotional event of consumer electronic, conducted in spring and autumn every year, at Dubai World Trade Center (DWTC). GITEX is considered as the largest event for consumer electronic across the globe, visited by large volumes of shoppers as well as technology enthusiast retailers and business. Known for exorbitant discounts, promotions and launches, it is believed that many in UAE wait all year to shop at GITEX and get the best deal. Besides, shopping the event is also popular for its euphoric atmosphere which is associated with numerous prizes and promotion.

GITEX Spring 2014

Like its previous edition in October 2013, the spring edition of the GITEX has been successful in resulting into both footfalls and sales as well. The sheer volume of festivity of the event was associated with visitors coming from all parts of UAE and Middle East. The second spring edition featured all the major brands such as Dell, Acer, HP, Lenovo, LG, Nokia, Toshiba and Samsung etc.

Smart phones such as Samsung S5 and HTC One M8 were most sought after entity followed by TVs, tablets, digital cameras and notebooks. It is slightly divergent from the research insights captured by our team at previous GITEX in October 2013, wherein majority of the visitors showed interest in Laptops and PCs followed by the smartphones.

Interestingly, there was also interest shown towards home appliances. Many new companies have participated from South Asia and Europe, primarily in search of potential distributors and buyers. After all like every year, the GITEX spring 2014 was actively participated by most of the major local electronics distributor such such as E-City, E-max, Jacky’s Electronics, Jumbo Electronics, Max Electronics, One Mobile, Plug-Ins and Sharaf DG etc.

Health of Consumer Electronic Market in UAE

GITEX, which is being conducted since 1996 in Dubai is the reflection of UAE’s evolving consumer electronic market, that is presently estimated at AED 14.3 (USD 3.9) billion and is expected to reach near around AED 17.3 (USD 4.7) billion by 2017, with an average estimated growth rate of 5-5.5 percent. The electronic market in UAE can be primarily split into smartphones, tablets, laptops and TVs. Other devices include gaming, cameras, memory devices and households, etc.

Almost half of the market consists of computers, laptops and notebooks, which is however a shrinking market. The shrinkage could be explained due to rapid cannibalization by smart phones and tablets. The sales of PC have dropped down and is expanding at a moderate rate (2-3 percent). The reasons attributes involve, LCD screen which are economic for home use and rapid sales of smart TV. (It is interesting to note that UAE accounts for around 3 percent of global smart TV sales). In the PC segment, sales of evolving products such as slim note books and tablet-laptop combos are picking up fast.

The audio-visual market,which involves TV and music systems is estimated at AED 5.1 (USD 1.4) billion in 2013 and is expected to grow at 5.5-6 percent range in the near future. The growth is primarily driven by the flat screen segment.

The mobile phone market in UAE, which is presently split into smart phones and regular handsets, is estimated at over AED 1.84 billion (USD 500 million). Though a depleting brand, Nokia still commands highest volume of sales followed by Samsung, Blackberry, and Apple. LG, Sony, Huawei and HTC have marginal presence in the market. The mobile phone is also the fastest segment in consumer electronics, growing at a near double digit growth rate.

The growth of smart phone market in UAE could be attributed to multiple reasons. Besides, young demographics, expanding job market, rising income and cosmopolitan appeal; two other crucial factors that shape up mobile consumption in UAE are strong brand association with smart phones and massive internet consumption on smartphones. The latter is further bolstered by fast deployment of 4G technologies across the gulf nation.

Besides a robust internal market, UAE headed by Dubai is also on the forefront of a vast trading market in consumer electronics. Last decade, trade in consumer electronics in Dubai (UAE) has been growing rapidly at an average rate of around 37 percent, with KSA, Iraq and Kuwait being the top trading partners and accounting for over 50 percent of the total exports. In terms of import, China, which mainly supplies computer hardware, tops the list. The China-UAE relationship has been demonstrated with expanding Chinese presence in GITEX and other related platforms.

Near Future Trends

Mentioned below are key points, which can capture the future trends of electronic retail business in UAE.

Rise in economic activities in UAE, should directly enhance electronic consumer sales. Through a series of reports, we have discussed about the numerous high profile projects and activities happening in UAE. These activities should result into expansion of job market and rise in income, leading to more expats and population expansion. All these things in tandem should stimulate consumer spending.

Likewise, technological overlapping will be an important dimension, influencing the consumer electronic retail landscape in UAE. An example of it is observed in the present context in the form of cannibalization of the PC market due to rise in sales of smart phone and tablets. Such trends will be seen more due to rising income coupled with busy lifestyle, technology friendliness and brand consciousness, wherein traditional boundaries will fall down and new innovative products will pick up fast.

UAE tourism culture driven by high volume tourist arrival and shopping festivals and exhibitions will be closely interlinked with the consumer electronic retail sales as well. Besides, GITEX Shopper other events such as Dubai Shopping Festival (DSF) and Dubai Summer Suprizes (DSS) also catalyze massive consumer electronic sales due to discount offers and festive atmosphere.

Hence, it could be concluded that aligned with the rise in economic activities, consumer electronic spending should further get boost in UAE. Capitalizing on rising income, favorable social and economic demographics and expanding tourism and retail sector; the Gulf country will attract more companies, distributors and retailers operational in this field. A rising consumer electronics sector will also get translated in more participation, engagement and euphoria associated with mega events such as GITEX. In this regard, even bigger and larger GITEX can be anticipated in the near future, defying earlier events in terms of visitors and sales.

Hence, it could be concluded that aligned with the rise in economic activities, consumer electronic spending should further get boost in UAE. Capitalizing on rising income, favorable social and economic demographics and expanding tourism and retail sector; the Gulf country will attract more companies, distributors and retailers operational in this field. A rising consumer electronics sector will also get translated in more participation, engagement and euphoria associated with mega events such as GITEX. In this regard, even bigger and larger GITEX can be anticipated in the near future, defying earlier events in terms of visitors and sales.

Research Konnection

This research report is compiled by Research Konnection Team; a Dubai based market research and business consulting firm that is focused on capturing latest insights and happenings of major events across various sectors and industries in UAE. If you are looking for more research, information and qualitative/quantitative data, then feel free to contact us on waqas@researchkonnection.com. 

Author: RKonnect
The author is the Managing Director of Research Konnection, a Dubai based market research and consulting firm that helps local and international companies to identify emerging business opportunities and successfully expand in the Gulf region. The author can be reached at waqas@researchkonnection.com
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