Brick-and-mortar sales will continue to be the major source of sales, Euromonitor says
Dubai: Online sales for consumer electronics in the UAE is expected to witness an 18 per cent growth this year compared to last year to reach Dh1.5 billion, the fastest growing sales channel for electronics, an industry expert said.
“As penetration for smartphones and internet increases in the UAE and continue to mark one of the highest around the world, the road is paved for success for e-commerce,” Ahmad Bakr, research analyst at Euromonitor International Middle East, told Gulf News.
The value of total consumer electronics industry in the UAE is expected to fall by 0.23 per cent to Dh11.95 billion compared to Dh11.97 billion last year.
He said that players such Souq.com, especially after being acquired by Amazon, are increasing the variety of the products they offer, alongside very attractive price offerings and free shipping.
“This will increase awareness for consumers to pay less and get the product couple of days after. Also, a lot of retailers are now focusing on developing their omni-channel [online and offline stores] strategies, a situation that is continuing to drive focus on online sales, especially for electronics,” he said.
However, he added that brick-and-mortar sales will continue to be the major source of sales for consumer electronics. Over the next five years, online sales will still not be higher than brick-and-mortar sales. Online sales will only surpass brick-and-mortar sales in the long run.
When asked whether free shipping and lower prices offered by Souq will impact the brick-and-mortar sales and Gitex Shopper, he said of course it will have an effect. Last year, for example, Souq launched some promotions during the time of Gitex, and it had a clear effect on Gitex.
However, he said that consumers are still more inclined to go to those shopping festivals to see, touch and feel the product. Which is why we are not yet at the stage of online sales overtaking offline sales for electronics.
“Over the coming years, we will continue to see developments when it comes to online shopping experiences, and more of online electronics festivals [such as White Friday by Souq]. This will definitely affect more and more sales for offline channels,” he said.
Moreover, he said that consumers seem to build greater trust with Souq for online purchases of electronics than other online players. This situation is making it difficult for other e-commerce players to build their strong footfall in the market.
“The market will continue to witness stronger developments when it comes to logistics partnerships. We will start witnessing new innovations into the sector of delivery and shipping, such as the use of new third parties that offer solutions for shipping and same day deliveries,” Bakr said.