Middle East vendors flock to Iraqi market

Middle East electronics vendors capitalise on strong Iraqi consumer demand.

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By  Michael Thorne Published  June 12, 2006

An increasing number of Middle East consumer electronics vendors are generating significant sales in Iraq by circumventing traditional route-to-market channels. Despite the volatile nature of the the country’s domestic economy and ongoing security issues, there remains a huge consumer demand for electronics goods in Iraq, with many vendors developing innovative strategies for expanding their business in the country. “Iraq represents a potentially huge market for Middle East vendors,” Olympic Group’s regional export manager, Khaled Hegab, told ECN. “In the majority of cases, consumer electronics products are being purchased cheaply by Iraqi buyers in neighbouring countries who are managing to incorporate high margins thanks to strong domestic demand. While there are obvious risks associated with operating in Iraq, a large number of vendors are dumping goods into the country and everyone is making money.” Samer Kozman Youssif, technical office manager for Egyptian home appliances vendor, Alaska, said Iraq presented local manufacturers with a golden untapped commercial opportunity. “Iraqi buyers are coming to us in Egypt looking to purchase large quantities of goods. They are happy to manage the distribution channels themselves,” he told ECN. The lack of reliable domestic distributors means that many of these products, ranging from white goods to electronics gadgets, are being transported into Iraq via road from neighbouring countries such as Syria, Iran and Turkey. Despite these opportunities, many other consumer electronics vendors, including multinational companies, are choosing to shy away from the Iraqi market. Most cited concerns regarding the reliability of payment methods and the logistical challenges associated with getting product to market. “We refuse to get heavily involved in Iraq as long as there remain doubts about payment processes,” said Vasant Menghani, MD of Quality Gulf, which owns the Touchmate consumer electronics brand. “We have commercial links with Iraq, but we are reluctant to officially enter the market. “An Iraqi buyer visits us once a month in Dubai, but we leave the distribution issues to him. “As far as we are concerned, whatever business we generate in Iraq is created from Dubai.”

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