October 30, 2020

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So much more than Dubai Duty Free

by Stuart Wilson, Wednesday 13 February 2008

“While the storm clouds are gathering over so many global markets, the Middle East region confirmed its strength again in 2007. With the development of new organised retail chains and fierce competition, the Middle East is slowly emerging from its ‘wild frontier’ reputation to stake its claim as a modern marketplace.

Retail chains have picked up on the hunger of new breed of Middle East consumer while simultaneously appealing to an emerging tech-savvy segment of the population. Well-located shops are showing a strong understanding of the local needs.

Middle East tourism is rising with mega structures and developments such as the tallest building in the world [Burj Dubai] making their mark on the landscape. This is matched by rapid region-wide developments in distribution, channels-to-market, new customer segments and new consumer opportunities.

During the course of 2007, countries such as the UAE and Saudi Arabia displayed remarkable growth in the consumer electronics (CE) space. The UAE recorded a 12% year-on-year volume growth rate with Saudi Arabia climbing 6%. A strong up-selling trend was visible in the UAE market while the Kingdom’s market was characterised by strong price competition.

Stellar growth rates

Unit sales of LCD panel televisions almost tripled in Iran, soaring 180% while growth of 160% was recorded in the UAE and unit volume doubled in Saudi Arabia. Plasma television sales also climbed year-on-year in 2007 with the UAE, Saudi Arabia and Iran recording growth rates of 40%, 34% and 24% respectively.

The Middle East market is growing rapidly with the UAE at the forefront of the current wave of regional investment, but other countries are following close behind. The overall UAE market climbed 20% in 2007 with products such as laptops and desktops showing significant sales increases. What is now clear is that the most advanced consumers co-exist in the MEA region alongside new customers purchasing CE and IT products for the first time.

The region is also showing a healthy appetite for mobility products and digital devices. Sales of MP3 players danced to an upbeat tune in 2007, with UAE sales jumping 56% in the UAE and Iran not far behind on 44%. The Middle East’s insatiable demand for mobile phones also continued in 2007 with region-wide unit sales up 27% year-on-year.

Pockets of the Middle East market boast some of the highest GDP per capita in the world and the region also contains some of the biggest untapped consumer pools. Modern retail outlets, product quality, vendor choice and cutting-edge technologies are fast becoming the fundamental building blocks of today’s Middle East market.

The trends highlighted at last year’s DCC are now becoming a reality: chain stores existing alongside proximity retailers and an organised retail channel delivering new lifestyle experiences to consumers.

The competition today lies within the sub-regions of the wider Middle East. There are opportunities and challenges for each vendor and retailer looking to make the most of this rising star in the global market. GfK has the expertise to provide a bird’s eye view of the region’s retail dynamics, making your future success possible.”

GfK is the official research partner for the upcoming DCC MEA event in Fujairah, UAE from May 19th-21st 2008. DCC is the ultimate professional networking event for senior executives from the consumer electronics, digital device and ICT products retail channel in the Middle East & Africa (MEA) region. DCC MEA is a focused event for retail executives based on the successful concept of bringing high-level buyers from emerging markets into productive contact with vendors. www.dcc-mea.com

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