x Abu Dhabi, UAEThursday 18 January 2018

Shopper's delight: Price gap narrows with US and Europe

In-store offers and online shopping mean there are bargains to be had for electronics and household goods.

A man checks out electronics gadgets at a store during Christmas.
A man checks out electronics gadgets at a store during Christmas.

DUBAI // Consumers are still paying more for electronics and household goods than in Europe and America - but the price gap is getting smaller.

More in-store special offers and a wider choice of online bargains mean shoppers who do a little research can find better deals.

A Sony DVD player cost Dh279 in the UAE this year and Dh237 in the UK. Last year it cost Dh740 in the UAE and Dh420 in the UK.

"The discrepancy in prices of electronics sold in the UAE compared with Europe or North America is largely the result of distribution and supply and demand," said Karima Berkani, senior research analyst for Euromonitor International, a global market research company.

"For products like laptops, pricing can also fluctuate as the result of specialised hardware, such as Arabic keyboards."

Despite these higher prices, the UAE is much cheaper than other countries in the Middle East, said Ms Berkani. As a result, many tourists from the region purchase personal electronics while visiting the UAE.

Traditionally, consumers have looked for deals during shopping festivals but are now increasingly switching to online promotions and group-buying discount websites.

"More and more, 'deal of the day' websites are featuring discounts on electronic products or on gift cards at electronic outlets, and consumers are purchasing them," said Ms Berkani. "Prices of some electronic products have increased, while others have seen unit prices decrease."

The price for LCD televisions has gone down since last year because as technology gets older it becomes cheaper, she said. The slightly more favourable exchange rates also play a part, with the iPad2 sold through Apple's UAE website costing Dh2,099, which is actually cheaper than its UK site (Dh2,553).

Although it is difficult to make a like-for-like comparison with electronics, some items, such as DVD players, have become much cheaper because Blu-ray devices have become more popular.

A 320GB PlayStation 3 console retails for Dh1,449 in the UAE compared with Dh1,098 in the US.

With Sony's new hand-held console, the PlayStation Vita, the Wi-Fi 3G model costs Dh1,499 in the UAE but Dh1,098 in the US.

The perception that the UAE is much more expensive than elsewhere puts many consumers off shopping here.

Mohammed Jamal, from the UK, shops only when he is on business in Europe or America. "It is much more expensive to shop for electronics and household goods in Dubai than in Europe or the US," he said. "I'm lucky as I get to travel a lot, particularly back to the UK, so I shop there.

"Seasonal discounts are much bigger than they are here and they have newer stock than the UAE."

Mr Jamal has spent up to Dh15,000 on everything from clothes and electronics to homewares in the past six months. "If I'd done the shopping in Dubai it would have probably cost me about Dh30,000," he said.

Sana Pervez, a Pakistani who moved to Dubai a year ago, was shocked by the price differences between the UAE and elsewhere."It's true that there are a lot of options if you want to shop for electronics," she said.

"But the problem is that you have to do a lot of shopping around to make sure you get the best price as there can be a big discrepancy. I have also noticed that beauty products are more expensive here than in the UK."

She often buys items in Britain and her sister sends them to her in Dubai.

"I also tend to go for a lot of the group-discount offers because you can get some good deals," she said. "But sometimes you have to go to stores for things like clothes."

Retail is expected to boom in the next year, according to Business Monitor International, a global analysis company.

The UAE's consumer electronics market is expected to hit US$3.8 billion (Dh14bn) this year, increasing further to US$4.7bn in 2016, "driven by the popularity of new electronic devices such as LED and 3G TV sets, 3G mobile handsets, smartphones, feature-rich notebooks, MP3/MP4 players and Blu-ray players", the company said.

David Macadam, head of retail for consultants Jones Lang LaSalle, also expects retail sales to grow in the next 12 months.

"Some of the price increases can be put down to not all the electronics being compatible with systems here," he said. "At the same time, although prices are high here you will have people who can afford to buy these items as cost isn't a factor for them."

Mr LaSalle said the UAE had a large, affluent population that could generally afford the items even though they were more expensive than elsewhere.

Tourists from other GCC statesand further afield were also playing an important role in sales.

"What it boils down to is that prices are high because in general most people are prepared to pay," he said.