Retailers forecast big sales at Gitex

Gitex 2011: The UAE's largest electronics retailers forecast double-digit sales growth at this year's Gitex Shopper in Dubai - although high overheads mean that many expect to make a loss at the event.

A visitor inspects a BlackBerry device at last year's Gitex. EPA

Sales at the UAE's largest electronics show are forecast to exceed Dh185 million (US$50.3m) this year, with the major retailers predicting double-digit revenue growth, according to a poll by The National.

Trends: What's to come

Laptops Laptop computers and netbooks were the top-selling products at Gitex last year, followed by mobile phones and digital cameras, according to the event organisers. That trend is set to continue, as demand for laptops has held up against the arrival of tablet computers such as the iPad, said Nadeem Khanzadah, the deputy general manager for retail at Jumbo Electronics.

Tablets While the iPad may have been the darling of the tablet market in previous years, other manufacturers are starting to threaten Apple's dominance in everything touchscreen. Mr Panjabi said cheaper tablets made by other manufacturers had arrived. "A lot of the other brands are starting to eat into the Apple share," he said. Other manufacturers including Samsung, Asus, HP and Sony have launched rival tablet products, bringing greater competition to the market.

3D televisions Many electronics manufacturers are pushing 3D televisions, although some analysts are sceptical about their long-term appeal.

Demand for laptops, tablets, smartphones and TVs is expected to be especially high at the Gitex Shopper event, which starts tomorrow in Dubai.

However, some retailers admit they expect to make an overall loss at the event, due to high overheads and exhibition fees.

According to the organiser of Gitex Shopper, sales hit Dh170m last year as more than 166,500 people flocked to buy the latest gadgets such as iPads, 3D televisions and BlackBerry smartphones.

All four main electronics retailers in the UAE polled by The National said they expected sales growth of more than 10 per cent this year.

"The main drivers, apart from laptops and tablets, are smartphones and 3D LED TVs," said Nadeem Khanzadah, the deputy general manager for retail at Jumbo Electronics. "These are the four categories which we are banking on most."

Jacky's Electronics is forecasting revenue growth of 10 to 12 per cent compared to last year's event, while Sharaf DG predicts sales to rise by 20 per cent, and Jumbo Electronics forecasts growth of 10 to 15 per cent.

"We're looking at a double-digit growth, at between 10 to 15 per cent in value, which would translate to maybe a 20 per cent increase in units sold," said Mr Khanzadah.

The Plug-Ins chain forecasts 40 to 50 per cent growth on last year's Gitex Shopper sales.

"We're forecasting significant growth this Gitex compared to last year," said Omar Abushaban, the general manager of Plug-Ins. "We're looking to outpace most retailers in terms of growth."

Yasser Sharaf, the managing director at Sharaf DG, said he hoped to boost sales through a promotion in which customers receive free gifts with every purchase. "We have Dh10m worth of giveaways," he said.

Ashish Panjabi, the chief operating officer of Jacky's Electronics, said the retailer was boosting its exhibition space by 20 per cent to 1,195 square metres this year, staffed by more than 800 employees.

"We're targeting at least a 10 to 12 per cent sales increase this year over last year," he said. "Tablets, I think, will be another big category this year."

Upcoming religious festivals, including Eid, Diwali and Christmas, are partly behind the forecast rise in sales, as consumers look out for bargain gifts, said Mr Panjabi.

Gitex 2011: Gadgets and gizmos galore

Look into the future Read all of The National's coverage of the huge UAE technology show. Learn more

He said revenues from Gitex Shopper typically exceeded those of "a good month" during the rest of the year. "It's another month on the calendar. This is month number 13 for us; [the Dubai Shopping Festival] is month number 14," he said.

However, Jacky's Electronics, like some other retailers, expects to make an overall loss during Gitex Shopper, due to the high cost of setting up temporary stands.

"I don't think anyone comes out with a rosy balance sheet after the Shopper. That's going to be the situation with virtually every retailer that participates," said Mr Panjabi.

"It's as good as setting up a store, but you shut it after a week. With all the extra logistics, and manpower and sales staff that you take on for that period, it is quite a drain."

However, Mr Panjabi said participating in the event helped position the brand favourably among consumers.

Despite the booming demand for electronics, other retailers said they would also struggle to make a profit at the Shopper event.

"Gitex is always a loss-making endeavour, no matter which way you look at it.

"There's so much overhead involved in going into Gitex. It's really about winning customers," said Mr Abushaban.

"People that go into Gitex looking to make huge profits are probably going to be sorely disappointed."

The organiser of the event rejected the idea most retailers made a loss at the exhibition.

"I wouldn't say it's a fair assessment. It depends on what product category they are selling," said Hemesh Chandavarkar, the industry group manager at Gitex Shopper.

"Last year, in a downturn year, the industry was low but we still had a fabulous response."

This year marks the 21st annual Gitex Shopper retail show, which is held at the Airport Expo Dubai.

A sister event, Gitex Technology Week, which focuses on industry issues, is held at the Dubai International Convention and Exhibition Centre and starts on Sunday.

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