Trends
in the 119 million-strong Middle East consumer
market indicate that the sales forecast of $37
billion (Dh135.7bn) in consumer electronics and
retail technology sector will be met by the end
of the year.
According to a study carried out by GfK-MEMRB
Marketing Services, the Dubai-based subsidiary
of one of the largest market research firms in
the world, the regional consumer market will
witness growth despite the global slowdown.
The study also predicts the total market for
consumer electronic and technology products to
grow to $39-$40bn in 2009. It covered markets in
the UAE, Bahrain, Egypt, Iran, Jordan, Kuwait,
Lebanon, Libya, Oman, Qatar, Saudi Arabia,
Sudan, Syria and Yemen.
The digital consumer technology sector alone is
expected to see retail sales in excess of $24bn
by the end of 2008. "Whatever the effect of the
global slowdown, we are anticipating continued
regional growth in this sector for the full year
of 2008 at 9.6 per cent compared with last
year," said Franck Thureau, General Manager of
GfK-MEMRB.
"Innovation is clearly leading the continued
growth of the digital consumer technology market
and it is now running ahead of the fast moving
consumer goods market in general," Thureau said.
"We expect that trend to continue in the Middle
East in 2009, whatever worldwide concerns are
around. For the digital sector, we forecast
$25.6bn for 2009 – a growth rate of 6.6 per
cent."
The study said the main growth contributors will
be LCD and plasma TV products with $ 2.2bn
additional revenue expected. Second comes the
personal computer business with added revenue of
$600 million and thirdly monitors at $290m.
The dominant digital product category remains
mobile and smart phones with a total of $10bn in
sales expected for 2008 – a full 41 per cent of
the entire digital consumer market.
"The fact is that the mobile phone is a status
symbol for many consumers in the Middle East and
they do not hesitate to change their mobile
phones every six months or so," said Thureau.
High resolution cameras, MP3, Bluetooth, touch
screens and new mobile phone operating systems
are all driving growth, he added.
The second digital product category is desktop,
laptop and notebook computers with a market
value of $5bn. Third comes LCD TVs with a market
of $4bn in 2008. Growth is exponential in all
Middle East countries, notably in the UAE, Saudi
Arabia and Iran.
In the UAE, independent retailers still lead
with a 60 per cent market share in volume for
major product categories such as LCD TVs,
digital cameras, mobiles and smart phones,
reported the study. However, big key-account
retailers like Sharaf DG, Plug-Ins, Emax,
Virgin, CompuMe, Axiom, I2, Cellucom, Carrefour,
Geant, Lulu and Panda are making heavy inroads
into the market.
"These superstore retailers have a 40 per cent
market share of product sales with 250 outlets
in the UAE," said Thureau, adding: "Shopping
malls are their base for expansion. For example,
the recently-opened Dubai Mall already has 23
new consumer technology outlets, contributing to
a total of 90 outlets in shopping malls across
Dubai alone."
The study showed that the home theatre business
is running well and contributing 48 per cent of
the audio home system market.
In addition, sales of products with a unit price
of $400 or more represented 19 per cent of the
sales volume in September. In the digital media
player market, MP4 has now taken half the market
volume and 73 per cent of market value with
consumers increasingly downloading videos as
well as music. Digital reflex cameras now make
up three per cent of the market in volume and 12
per cent in value. The 12 mega pixel cameras are
providing consumers with a high quality of image
and their market share in the compact camera
sector is already six per cent in volume. The
leading segments are seven (41 per cent) and
eight mega pixel (31 per cent).
GfK's market estimate for retail business of
major and small domestic appliances and
air-conditioning is $12.5bn. The value of the
refrigerator market is expected to reach $3.7bn
in 2008 with sales of more than five million
units. Up and down fridge-freezers dominate with
70 per cent of the regional market and bigger
models drive the market.
The highlights
-The 65 per cent of sales are of digital
consumer technology products such as notebook
and laptop computers, cameras and mobile phones.
-Independent retailers hold most of the Middle
East market but are heavily challenged by
electronic and technology superstores such as
Sharaf-DG, Emax and Axiom.
-Mobile and smart phones with 2008 sales of
$10bn make up 41 per cent of the digital
consumer market
