GITEX Shopper exhibitors suffer reduced margins

Retailers enjoy strong sales but report slim profits due to intense competition.

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By  Ronan Shields Published  December 9, 2006

GITEX Shopper & Consumer Electronics Expo 2006 generated unprecedented levels of business for UAE power retail exhibitors, however intense competition forced many to slash prices in a bid to secure business on the show floor. GITEX Shopper organiser Dubai World Trade Centre (DWTC) hailed the 2006 instalment the most successful yet, with US$23 million worth of sales generated over the seven-day event. However, many exhibitors reported that they had severely sacrificed profit margins in a bid to shift large volumes of stock and compete with rival retailers for business. “We recorded a 40% increase in sales compared to last year’s event,” said Plug-Ins Electronix divisional manager Bradley Bennett. “However, we faced such intense competitive pressure to shift stock, our margins were slashed by up to two-thirds.” Ashish Panjabi, the COO of power retailer Jacky’s Electronics, confirmed his company faced similar challenges at this year’s event. “We recorded a 45% increase in sales, however intense competition from rival retailers ultimately impacted our margins,” he conceded. In terms of sales trends, Panjabi noted reduced demand for handheld devices and other small items in lieu of an upsurge in demand for larger products such as LCD TVs. “In regards to particular brands, Samsung and Sony again proved popular,” said Panjabi. “However, the major surprise package was Sharp’s 32-inch Aquos TV. Such was the demand for this model, we sold out of stock after the first three days.” Avinash Shanbhogue, marketing manager for Jumbo Electronics – which boasted the largest physical presence at GITEX Shopper – attributed the shift in demand to the event’s increasing profile among mainstream consumers. “There was a greater percentage of families at this year’s event, which shifted product demand towards more substantial consumer electronics goods such as TVs and home entertainment systems,” he said. With GITEX Shopper attracting more than 125,000 visitors in 2006, a number of exhibitors also suggested the event had outgrown the confines of Dubai’s Airport Expo, with many calling on DWTC to consider alternative venues in 2007.

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