Vision - March 2009 - (Page 19) panel TVs, which are on the rise despite global economic duress. “While consumers are shifting increasingly toward lower-priced models, retail sales volumes are not declining in key retailers,” according to Steven Kaiser, commercial director, consumer electronics at GfK Asia, a research analysis firm. GfK’s data, drawn from organized retailers (i.e. large dealers and chains), showed increased volume in Taiwan, Hong Kong and Singapore during the 2008 “festive season” (November and December) and into early 2009. Overall sales volumes increased as much as 40 percent in some markets. Kaiser called the recent trends “encouraging news for the flat-panel television retail business in advanced Asian markets.” That kind of data offers encouragement to companies seeking a stake in emerging markets. Many companies have concentrated on China and the Arabian Gulf regions, because of their positive upsides. CEA has supported expansion in both markets via its participation in regional events: SINOCES (the next annual event is scheduled for July 9-12 in Qingdao) and International CES/Hometech. (The 2009 event has been canceled, but in previous years it has been a focus for regional CE marketing.) Retail activity, especially for CE products, in Dubai and its UAE (United Arab Emirates) neighbors continues to be high. “UAE retailers are optimistic,” blared a late January report in the Emirates Business 24/7 publication. Jacky Panjabi, managing director of electronics retailer Jacky’s Electronics which operates from Hong Kong to the Middle East, said in the report that his company Gallo Images/Getty Images is “going ahead with our expansion plan.” Jacky’s used the annual “Dubai Shopping Festival” frenzy to open a new outlet at Dubai Mall, its second store in that shopping center and its eleventh in Dubai. Jacky’s plans to open two more stores this year in the UAE. (www.jackys.com) Panjabi is focused on the growing culture of malls in retail shopping in the region, citing that as a reason for putting more stores in malls rather than street front shops. He voiced optimism about the new housing construction in the region triggering a “new demand for consumer electronics.” Meanwhile, in Saudi Arabia, Emax, the electronics retailing arm of Al-Bandar Trading, opened a big box electronics store at a Jeddah mall and unveiled plans to open at least five more stores this year and two more in 2010 while expanding into Dubai, Abu Dhabi, Doha, Muscat and India. Emax also is exploring future moves into China and Eastern Europe. (www.emaxme.com) On opening day of the Jeddah store, consumer traffic was so great that managers kept the store open “late into the night,” according to a Saudi Gazette report. “The changing demands of the region have led to the need for such a retailing concept,” explained Neelesh Bhatnagar, director of Landmark Group and CEO of Centrepoint and Emax in the Saudi report. “With Emax we plan to revolutionize technology retailing with its unique business model that combines the best brands, overwhelming product diversity, a range of never-before customer-friendly services and astonishing value, all in a large format store.” The current trend toward adding software and content services, along with hardware, to the CE product mix is taking shape in many markets. “Our synergies come together at the retail front end where Al-Futtaim provides solutions for connected devices and demonstrates them to end customers,” says Bhatia. “The smart-home concept is rapidly gaining acceptance, we focus on two fronts: a stripped-down version where entertainment is the focus and a full solution which [includes] security, lighting and airconditioning with remote control features. For this we have partnered with experts in this sector, especially from the USA. “The diversity of workforce and customer behavior is noticeable even within the Gulf countries,” notes Al-Fattaim’s Bhatia. “With a large migrant workforce the challenge is to offer the customer a consistent experience. This is only achieved through constant training of the disparate workforce.” The appeal of the vast markets in emerging economies is balanced by the occasional hassle to conform to local operating requirements. For example, last year, Intel and Broadcom launched an aggressive plan to bring Wi-Fi to China. Then the Chinese government ruled that Wi-Fi products must use a different security standard than the ones used elsewhere around the globe, thus forcing the companies to build products especially for China. Moreover, they would have to license the Chinese standard from a local company. Those requirements became a dealbreaker. A few months later, the Chinese authorities had a change of heart and removed the standards requirement. But that was not the final word and it was a lesson to other vendors about the vagaries of some national regulations. That is why local partnerships are valuable and often mandatory. Global firms ally with domestic companies that know the intricacies of in-country operations. In China, for example, companies seeking to do business must partner with a Chinese company, often from a governmentapproved roster of domestic firms. Such uncertainties—and different ways of doing business—pose hurdles to expansion. Yet the opportunities are so promising that global companies are finding ways to accommodate the differences. Intel’s Dallman, who has visited more than 50 countries in the past two years, summed up the market opportunities by citing a single unifying factor. “Each country’s population is unique in every way but one: technology [is] a necessary part in all their lives,” he said. “They all use technology as a means to improve the quality of their lives and their understanding of our world.” That’s a formidable objective—and an encouraging value—for selling CE under any conditions. • March/April 2009 www.ce.org 19 http://www.jackys.com http://www.emaxme.com http://www.ce.org
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