Egyptian peripherals market takes a battering
Channel reduces stock levels as customers buy 40% fewer peripherals than last year
Sales of printer peripherals in Egypt have declined for three successive quarters as the market has buckled under the weight of the global financial downturn.
Latest data released by IDC shows that shipments of peripherals slumped by almost 63,000 units during the second quarter of the year, marking a painful 37% decrease compared with the previous year.
The value of the market plummeted 45% to US$23m in the process.
Although Egypt is regarded as one of the MENA region's most promising markets, it was unable to stave off the effects of the downturn as consumers and corporate both reduced spending on IT equipment.
IDC says the drop in the number and size of government and corporate tenders was a major factor behind the slowdown in shipments and the drastic decline in market value.
"Procurement decisions and replacement cycles were delayed, and adoption criteria shifted to lower specifications to suit cost control measures," observed Rasheed Janabi, senior analyst with the imaging and hardcopy devices group at IDC Middle East, Africa, and Turkey.
Shipments of laser peripherals to Egypt fell 32% year-on-year to just under 29,000 units during the second quarter, while the value of those transactions declined 45% to US$20m.
IDC says the slowdown in sales was reflected in the behaviour of the channel, as distributors and resellers moved to reduce their exposure to the business.
"The factors leading to this decline relate to the cuts in government and corporate procurement budgets. This was compounded by measures undertaken by the channel to weather the financial crisis, such as lowering trade volumes and limiting stocking times and levels," said Janabi.
"Several vendors resorted to special measures to tackle the slump in demand, including channel restructuring, competitive pricing strategies and a shift in product focus to lower speed segments," he added.
Low consumer confidence also hampered the market for inkjet printer and multifunctional peripherals (MFPs) in Egypt. Shipments wilted 41% in volume and 46% during the quarter.