Prima targets retail
Prima International, a subsidiary of OEM giant Xoceco, has gone with consumer electronics rather than IT products to spearhead its retail expansion into the Middle East, and will form new channel partnerships for its range of LCD and plasma televisions.
Prima International, a subsidiary of OEM monster Xoceco has launched its own brand range of LCD and plasma TVs for Middle East markets. Moving away from its OEM roots — supplying monitors to HP and other vendors — Prima is targeting the consumer electronic market and is building retail channels to make the switch a success.
“With the launch of the Prima plasma and LCD televisions we expect our 19% annual revenue growth to increase significantly,” said Humphrey Wen, managing director for Prima International Middle East. “From September to December 2004, we anticipate sales of US$4m from these products, and this will only be boosted when we conclude partnerships with major power UAE retailers.”
Outside of the UAE, Prima is working with distributors to create channels suited to retail. “We are working with partners to develop a channel model suited to our new range, particularly in Saudi Arabia,” added Wen.
Prima’s parent company Xoceco is an OEM monster supplying major vendors with monitors and peripherals. Prima moved into the Middle East several years ago to support its OEM business, but has now taken the step to go retail with consumer electronics rather than its mainstay OEM products, as margins are higher for items such as LCD TVs, demand is rapidly growing and the market is still open for players with the right channel strategy.
“The timing was right for us to move into retail,” explained Wen. “The technology behind LCD and plasma electronics has matured and consumers are familiar with these products. We have experience in the Middle East market and our distributors are primed for the move.”
Prima is currently extending its stocking facility in Jebel Ali as the first step of Prima’s plan to implement a just-in-time delivery model and deliver a professional logistics service for the GCC region from its Dubai distribution hub.
While Prima has dedicated time and effort to implementing a comprehensive channel strategy, the manufacturer and other Chinese firms face a challenge in building up brand equity for products made in China. Despite there being a mass of IT manufacturing facilities based in the country, Middle East consumers still perceive Chinese goods as low quality.
Issues abound about the quality of goods made in mainland China. This was seen only recently when an A-brand components vendor placed ‘made in Taiwan’ labels on top of the original ‘made in China’ labels. Prima and Chinese vendors as a whole will have to address this issue of perception and demonstrate their quality to win the market share they crave.