Dubai, UAE: A recent Dubai Chamber of Commerce and Industry analysis, released on the occasion of its participation in GITEX Technology Week 2016 predicted that the Dubai consumer electronics market size is forecast to grow at 4.7% over the next 4 years to exceed $3bn by 2020.
According to the analysis based on latest UAE retail sales data from Euromonitor, the portable consumer electronics sub-category is expected to keep its lead with a 2020 sales forecast of $1.27bn.
Also, the computers and peripherals sub-category is forecast to retain its size at $937m, whereas in-home consumer electronics are expected to gain some traction to reach $900m; while no growth will take place under in-car entertainment sub-category with a sales forecast of $23m.
The analysis highlights Dubai’s retail sales activity which continued to show growth despite mounting pressure from low oil prices and rising global economic uncertainties. Such resilience is attributed to solid fundamentals that include rising population and incomes together with a steady influx of tourists to the emirate.
In terms of future growth, in-home consumer electronics is forecast to lead the 4 sub-categories with a Compound Annual Growth Rate CAGR of 7.6% between 2015 and 2020, portable consumer electronics is forecast to follow with a CAGR of 6.4%.
Growth is set to cool off in the computer and peripherals sub-category with a forecast CAGR of 0.9%; while in-car entertainment is only expected to retain its size with a CAGR of 0.7% over the forecast period.
The analysis’ estimate of Dubai’s consumer electronics market size during 2015 stands at $2.4bn after effectively expanding at a CAGR of 8.9% over the past 5 years.
Total sales for the category stem from portable consumer electronics ($930m), computers and peripherals ($902m), in-home consumer electronics ($621m) and in-car entertainment ($22m).
In terms of growth, in-home consumer electronics have led the 4 sub-categories with a CAGR of 17% between 2010 and 2015, computers and peripherals followed with a CAGR of 6.9%, while portable personal electronics came in 3rd after growing at a CAGR of 6.8%.
In-car entertainment did not do as good, as it saw its size shrink at a CAGR of -3.5% over the same period.
Market observers indicate that the main trend seen last year in consumer electronics sales is the gradual move towards more compact and multifunctional devices, especially those that offer internet connectivity, with consumers’ lifestyles becoming increasingly highly mobile and fast paced.
As a result, items such as tablets and smartphones are enjoying solid growth in sales. However, the increasing quality, processing power, and range of applications offered by these devices are taking market share from many other items, such as digital cameras, portable mp3 players, DVD players, laptops and desktops.
Dubai’s electronics and appliance specialist retailers continue to be the leading channel in consumer electronics due to their advantage in having a wide product selection and price range, as well as offering expert advice and tailored recommendations.
It is worth noting that the number of electronics and appliance specialist retailer outlets is strongly linked with the opening of new malls and shopping centres. Moreover, hypermarkets are also showing strength, with leading chains such as Carrefour and Lulu Hypermarkets competing to offer wide product ranges at very reasonable prices.
The strong presence if shopping-malls in the emirate has limited the size of internet retailing channel. However, store based electronics retailers are realizing that having a complimentary internet retailing site is becoming increasingly important to driving sales of consumer electronics in their stores, with many consumers checking prices and models online before or during shopping trips.
Dubai’s young population is interested in technological developments and keep up to date with the latest innovations. In addition, many consumers see electronic gadgets such as smartphones, tablets and smart watches as status symbols.
Another sub-category, the home audio and cinema has benefited greatly from the residents’ frequent purchases and product upgrades as it saw its sales volume rise by 16% last year, despite the high price tags. A similar growth rate is seen in sales of ‘Smart TVs’, which kept gaining popularity at the expense of -28% decline in demand for conventional TVs.