RetailVision Middle East: No End In Sight To Booming Growth

Retailer bankruptcies and earnings disappointments? Not in the booming Middle East retail consumer electronics market.

That was the big story at Everything Channel's RetailVision Middle East, which was held in Dubai earlier this month. The show attracted the biggest retailers from countries such as Egypt, Lebanon, Saudi Arabia, Turkey and United Arab Emirates, among others, as well as a host of vendors cashing in on what is still a booming double digit growth PC market.

Take B.Tech, the largest specialized consumer electronics and household appliances retailer in Eygpt. The retailer has seen an impressive, consistent annual growth of 30 percent over the last five years. And Dr. Mahmoud Khattab, chairman and CEO of B.Tech, told RetailVision attendees that the retailer is on track to open an additional 10 to 12 stores. And those kinds of expansion plans are not unusual.

Jarir Bookstore, the largest retail chain in the Middle East for IT products, also is continuing to expand. Jarir, which has 22 superstores, has already booked nearly $500 million in sales in only the first nine months of the year, up from $465 million for all of 2007. Jarir expects to be a $1 billion retail giant by 2010.

"This is a market where retailers are still growing very fast and still looking to expand," said Bob Snyder, the founder and Editor-in-Chief of The Distribution Channel Ltd., publishers of Consumer IT and On CE, who moderated several sessions at RetailVision Middle East. "You can't help but be awed by the growth here."

Snyder, who watched the consumer electronics explosion that took place in the U.S., says the Middle East is growing at an even more rapid pace. "This market is growing at Web 2.0 kind of speed," he says. "It's growing so fast I wish I could put it in a bottle and show it to people in America."

That doesn't mean that RetailVision attendees were unfazed by the world economic situation. That said, they certainly are not putting the brakes on expansion plans. It simply means more measured expansion. "They psychologically feel it but the market is still growing," said Snyder.

Snyder said that many American consumer electronics companies are missing a huge growth opportunity by not moving aggressively into the Middle East market. "There is growth to be had here," he exclaimed. "These people are absolutely passionate about bringing in new technology."

One of the amazing things about the Middle East market is the diversity and breadth of the different countries and markets -- each at a different point in the consumer electronics market evolution, said Snyder. "These are wildly different markets," he said. "You can't take a formula that works in Dubai and do the same thing in Syria. It just doesn't work. The key to success for both vendors and retailers is to adapt to the particular needs of each market."

One example of that entrepreneurial technology spirit thriving in the Middle East is Eon, a highly specialized high-end provider of smart technologies for home, office and retail that opened in June 2006. Eon features a broad range of products from the likes of AMX, GE Security, Siemens, Sony, Apple and D-Link.

The biggest obstacle to growth for companies like Eon is finding enough salespeople, said Snyder. "It's not lack of cash," he says. "It is lack of human capital. They can't find enough salespeople. They are importing salespeople from the Philippines, Pakistan and India."

A number of retailers can't get visas through fast enough for workers from such countries so they can keep on track to open new stores, said Snyder. That's a problem that many U.S. consumer electronics retailers would love to have right now.

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