Digital revolution

With the consumer segment proving to be such a significant portion of the overall ICT and consumer electronics landscape, it was always inevitable that the two channels would overlap. Huge growth in the uptake of digital lifestyle products has seen many distributors, and classic IT resellers, searching for ways to get a piece of action. Dubai-based distributor Empa recently set up a dedicated joint venture distribution firm - called e-retail - which is focused entirely on the retail sector. The company has already bagged exclusive regional rights for Taiwan-based electronics vendor Hannspree in the same way that Jumbo Electronics looks after Sony's products in the Middle East and Al-Futtaim works with Toshiba in the UAE.

There is little doubt that gaining access to the large consumer electronics stores represents the major priority for many vendors that want their products to be displayed to a large audience. Distributors, too, know that they need to form strong relationships with these retailers in order to increase their revenues in the consumer space.

Regional distributor Emitac claims it has a long history of serving the Middle East consumer electronics market and has seen the market dramatically evolve. Director of sales and marketing, Vijay Saraf, reckons it has only been more recently that the true potential of the market has been unleashed: "The power retailers, initially, for the first two or three years didn't have a clue - or any experience of the retail business, and in fairness neither did the suppliers, so we have all grown together. But the Middle East digital lifestyle market is still maturing and developing so there are plenty of opportunities around."

With new shopping malls cropping up all over the region, manufacturers are vying to get their products into the destinations where they will be most visible. That invariably means the large power retailers who can afford to set up multiple outlets. As well as having stand-alone outlets, Plug-Ins, Jacky's and Jumbo Electronics, Carrefour, Geant and Union Co-operative each occupy a vast amount of retail space in the region's most prominent malls.

Mohamed Jweied, retail business manager at Emitac, commented: "In this region, the climate is hot - so the malls here have started to grab a lot of customers in big amounts. If you're looking to buy any digital lifestyle product, you're preferred destination will be a mall. They have become part of the culture in the Middle East" According to Manish Bakshi general manager MEA at vendor BenQ, the rise in the number of shopping malls - particularly in the UAE - has heavily impacted classic IT resellers who used to serve consumers. "At first, it was the resellers in Computer Street who were seeing consumer demand in the UAE," he said. "Then, when big outlets like CompuME set up, that's what became popular amongst consumers. Now it's the malls which are seeing the demand, and it's the same in Saudi," he added.

Consumer electronics vendor Creative has traditionally looked upon the IT channel as the route to market for its consumer products given that its beginnings are in IT peripherals. However, as the vendor has broadened its scope to increase its focus on MP3s, for example, it has gradually turned to the power retail segment as its primary channel.