A Dubai Chamber of Commerce and Industry (DCCI) analysis, presented at GITEX Technology Week 2016, projects that the Dubai consumer electronics market will expand by 4.7% over the next four years, surpassing US$3 billion by 2020.
The analysis emphasizes Dubai’s robust retail sales growth despite challenges from low oil prices and global economic uncertainties. This strength is credited to strong underlying factors, including a growing population, increasing incomes, and a consistent influx of tourists. Notably, Dubai’s youthful population shows a strong interest in technological advancements and the latest innovations. Additionally, many consumers view electronic devices like smartphones, tablets, and smartwatches as status symbols.
Based on the latest UAE retail sales data from Euromonitor, the report indicates that the portable consumer electronics subcategory is projected to lead the market, with sales expected to reach US$1.27 billion by 2020. The computers and peripherals subcategory is anticipated to maintain its position at US$937 million, while in-home consumer electronics is predicted to reach US$900 million. However, the in-car entertainment subcategory is expected to remain stagnant, with projected sales of US$23 million.
Looking ahead, the in-home consumer electronics segment is forecast to experience a compound annual growth rate (CAGR) of 7.6% between 2015 and 2020, followed by portable consumer electronics with a CAGR of 6.4%. Growth in the computers and peripherals subcategory is expected to moderate, with a projected CAGR of 0.9%, while the in-car entertainment segment is anticipated to see a CAGR of 0.7% over the same period.
The analysis estimates that Dubai’s consumer electronics market was valued at US$2.4 billion in 2015, having effectively grown at a CAGR of 8.9% over the preceding five years.
Source: DCCI, Dubai Statistics Centre, Euromonitor. Dubai consumer electronics market size (US$ billion)
Total sales in the consumer electronics category are generated from portable consumer electronics (US$930 million), computers and peripherals (US$902 million), in-home consumer electronics (US$621 million), and in-car entertainment (US$22 million).
In terms of growth from 2010 to 2015, in-home consumer electronics took the lead among the four subcategories with a CAGR of 17%, followed by computers and peripherals with a CAGR of 6.9%, and portable personal electronics with a CAGR of 6.8%. Meanwhile, in-car entertainment experienced a decline, with a negative CAGR of -3.5% over the same period.
Market analysts highlight that the dominant trend observed in consumer electronics sales in the previous year is the gradual shift toward more compact and versatile devices, particularly those offering internet connectivity. Tablets and smartphones have witnessed strong sales growth. The increasing quality, processing capabilities, and diverse applications provided by these devices are capturing market share from other products, such as digital cameras, portable MP3 players, DVD players, laptops, and desktops.
Dubai’s electronics and appliance specialist retailers remain the primary sales channel for consumer electronics, benefiting from their extensive product selection, diverse price ranges, expert advice, and personalized recommendations.
Consumer electronics distribution breakdown (%)
| Outlets (% share in sales) | 2010 | 2015 | % change |
|---|---|---|---|
| Store-Based Retailing | |||
| Hypermarkets | 32.8 | 42.4 | +29.3% |
| Electronics and appliance specialist retailers | 46.7 | 43.7 | -6.4% |
| Mixed retailers | 6.2 | 2.0 | -67.7% |
| Other non-grocery specialists | 11.1 | 8.4 | -24.3% |
| Non-store retailing | |||
| Internet retail | 3.1 | 3.5 | +12.9% |
Source: DCCI, Euromonitor
It’s noteworthy that the number of electronics and appliance specialist retail outlets is closely tied to the establishment of new malls and shopping centers. Simultaneously, prominent hypermarket chains such as Carrefour and Lulu are providing a wide array of products at competitive prices.
The significant presence of shopping malls in Dubai has constrained the growth of the internet retailing market. However, store-based electronics retailers are recognizing that a complementary online retail presence is becoming increasingly vital to boost sales at their physical locations, as many consumers research prices and models online before or during their shopping trips.
Another subcategory, home audio and cinema, has benefited significantly from residents’ frequent purchases and product upgrades. Sales volumes increased by 16% in the past year despite high prices. A similar growth rate is observed in sales of smart TVs, which have gained popularity at the expense of a 28% decrease in demand for conventional TVs.