Plug Ins, a division of Al Futtaim, yesterday said that it has managed to eke out annualised sales growth of 2 per cent this year even as a survey showed that consumer spending on electronics fell by 16.5 per cent from last year.
The electronics retailer’s annual survey released yesterday found that UAE household spending on electronics fell from Dh4,793 in September 2014 to Dh4,000 this year.
Sean Connor, the group’s managing director for electronics, said a drop in tourist numbers and the changing travel patterns of UAE nationals had affected its bottom line.
“The drop in Russian and Chinese visitors has been significant in our stores,” said Mr Connor. “The relaxation in visas for UAE nationals to Europe has also effected our sales. The long school holidays coupled with Ramadan also had an effect. Our Dubai Mall store saw footfall stay flat compared with last year.”
In contrast to Plug Ins, Emaar Malls, operator of The Dubai Mall, registered an 11 per cent year-on-year increase in visitor numbers to its shopping centres in the first half of the year.
In May this year the European Parliament voted to allow visa-free travel to Europe for UAE citizens. The 26 Schengen countries, plus another eight where Schengen rules apply, are visa-free for Emiratis.
Dubai’s retail space stands at 2.9 million square metres, with another 194,000 sq metres expected to be delivered this year, according to the property consultants JLL. Another 373,000 sq metres will be delivered next year bringing a total of 3.5 million sq metres of retail space available in Dubai in the next 18 months.
“We would love to see mall rents come down, but it hasn’t happened yet,” said Mr Connor.
Plug Ins’ consumer survey which sampled 2,450 people from 58 different nationalities found that smartphones sat at the centre of the electronic retail ecosystem with 42 per cent of respondents replacing their smartphone every two years. TVs were the second most wanted item by 36 per cent of respondents but consumer tastes have changed for bigger panels with 40 to 42 inches being the most popular now against 30 to 39 inches last year.
Plug Ins, in reaction to the survey, said it would no longer sell panels of 32-inch and smaller.
The electronics retailer, which operates nine stores across the UAE, plans to relaunch its e-commerce site on October 14.
The site was originally launched in June 2014 but did not capture the public’s imagination.
“We found that our offering did not reflect the in-store experience of fun and exploration,” said Omar Abushaban, general manager for Plug Ins. “We have learnt from our first venture and have seen the real demand in two or three categories and know more what the customer wants from e-commerce.”
Euromonitor forecasts UAE overall online sales will top Dh10.1 billion by 2019, up from about Dh2bn in 2014.
ascott@thenational.ae
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