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Has retail got its mojo back.

Power retailers are buoyant about a snazzier fourth quarter and believe spending habits are changing for the better. The IT retail business in the Middle East is a rapidly growing segment, which is constantly amassing more players. This not only enhances the level of competition, but also makes retailers more innovative in their approach to customers. It also makes them more vigilant regarding the products they sell, making most opt for fast moving electronic products with guaranteed returns, whilst others take a different approach and go into niche markets. The concept of retail has also changed. In the past, retail stores were generally looked at as destinations where people from all over town would come shop and then return home. Nowadays, retail stores have to be strategically placed within communities, so that they are closer to shoppers and well connected by transportation links. This is the reason why retail giants believe in investing in expansion and marking their territories in every habitable area possible. Neelesh Bhatnagar, the CEO of Emax said: "We came into the business of electronics retailing about five and a half years ago. We came in with a business plan, and at this point in time, we are exceeding our plan. We have opened 35 outlets across the GCC and another 15 are in the pipeline. By the middle of 2013 we will have a total of 50 stores and Emax will be by far the largest chain of electronics retail in the Middle East." He remarked that Emax, a late entrant into the electronics retail business, is already witnessing phenomenal growth. "We are achieving a year-on-year growth of 32%. This is putting the company in the right direction and generating a lot of cash for our expansion plans." Bhatnagar was confident that Q4 will definitely be much better compared to last year. He sees the markets in Saudi Arabia and the UAE booming and thus benefitting the economies of the region as a whole. "There is a much better sentiment overall, and people are willing to spend. I can see the market is moving towards premium products. People are buying high-end products like ultrabooks, smartphones and tablets, which means they have confidence and they are willing to spend money. I think this is a very positive indication of the economy." Ashish Panjabi, the COO of retail veteran Jacky's, said he is extremely positive and excited about Q4 and the future. From the sales point of view we are definitely doing much better compared to last year. He said: "The consumer footfall has increased and there are a lot more tourists. From the product point of view also there are a lot of new products that have entered the market, including smartphones, ultrabooks, tablets, cameras, DSLRs and Smart TVs. The economy has grown larger and the product lifecycle refresh rates have become quicker, thus helping sales." According to both retailers, the product lines that are currently hot sellers include tablets and smartphones for connectivity, as well as SLR cameras and LED TVs. Bhatnagar said: "The latest technology is what everyone wants today. We are concentrating on these product categories." Panjabi also advised that along with spending power and customers feeling more confident, finance also plays an important role. "Virtually every bank has offers at the moment where you can buy products and pay over six monthly installments or longer. This definitely helps the retail business." The massive success of the recent GITEX Shopper is a clear indication that the customer is ready to spend again. The organisers of the exhibition said the total footfall exceeded estimated expectations of 175,000, while total retail sales crossed estimates of AED200 million ($54.4 million). Bhatnagar and Panjabi said that most exhibitors ran out of stock of certain products at the show and even vendors couldn't keep up with the re-stocking demand. It certainly looks like happy days are back for the retail channel.

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Publication:ITP.net
Date:Nov 25, 2012
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