UAE electronics sector may see 20% growth - Emirates Business 24/7 2010.

Lower warehousing and logistics costs offer an opportunity to electronics businesses in Dubai Middle East Companies ahead of others in offering latest technology to customers.

Despite a dull 2009 and the depressed economic climate, the electronics industry in the UAE can expect to grow by 15 per cent to 20 per cent this year, given there are no unpleasant surprises, according to Deepak J Babani, CEO of the Eros Group.

Speaking to Emirates Business, Babani said the electronics companies in the Middle East are one step ahead when it comes to offering the latest technology to customers. "The UAE has already launched full HD TVs and internet TVs. However, the services are still in the nascent stages here. The pressure is on the service providers and not us. I'm sure connectivity will improve and the cost of using services will come down in the future," he says.


How has the economic downturn been for the electronics industry? How long do you expect this tough situation to continue?
The electronics industry has been quite insulated from the global downturn as compared to other industries. This is due largely to the fact that price points of electronic and appliance products have been coming down, which has, in turn, helped sustain demand. The demand for electronic goods (LCD TVs and cameras) has gone down by five per cent compared to 2008. The demand for appliances has gone down by 15 per cent 20 per cent over the same period. This year's outlook is a bit uncertain due to the volatility in the economic environment. However, if there are no unpleasant surprises this year, the industry is expected to grow by 15 per cent to 20 per cent.
 
Do you think consumer electronics companies/retailers will have to lower their costs in the future to stay in business?
With new technologies emerging, the ?demand for consumer electronics is expected to grow and it would not be imperative for electronics companies and retailers to cut cost margins to stay in business. I believe with the current real estate prices and lower inflations rates, companies will have a cost advantage and customers will automatically see reduced prices. In fact, during the economic boom a lot of overseas customers from Africa and CIS countries were finding sourcing products in Dubai quite expensive. Now, with lower costs in warehousing and logistics coupled with lower inflationary trends, we can see these customers returning to Dubai to source their requirement. This is an additional opportunity for the Dubai electronics business.