The Middle East market usually refers to the 9 countries around the Persian Gulf and the Arabian Sea and the surrounding Arab countries, with a total population of nearly 700 million people, and the per capita annual income ranges from 3~40,000 US dollars in the United Arab Emirates, Kuwait and other countries to 5~6,000 US dollars in Iran, Iraq, Yemen and other countries. The light industry, daily use, and electronic products of these Arab countries basically rely on imports, and the prices of products are widely medium and low.
In the post-pandemic era, the UAE's retail market has grown again due to the resumption of tourism in the Middle East, the steady flow of tourists, strong consumption and a recovery in business. The UAE reopened its borders in 2021, with consumer spending 4.5% higher in 2021 than pre-pandemic levels, according to a report by shopping malls, retail and leisure conglomerate Majid Al Futtaim. In the first nine months of 2022, the UAE's retail sector continued the strong momentum of the previous year, with an estimated annual growth of around 15%. As businesses and governments begin to re-examine and improve services, digital and automated business solutions have become a promising area post-pandemic. Policies such as the UAE Digital Government Strategy 2025, coupled with private sector investment and innovation, have led to a surge in demand for integrated business solutions.
Jacky's Group was founded in 1970 in Hong Kong, China, and initially operated a mail-order business. In 1985, the company noticed the rapid growth and business opportunities in the Middle East, Africa and South Asia, and opened an office in Dubai as a second sourcing and trading center. Over the years, Jacky's Dubai business has grown and the office is now the Group's main business management and distribution centre, employing more than 600 people.
Jacky's currently covers electronics retail, distribution, logistics and food in the UAE, Hong Kong, Singapore, Kenya, Tanzania and Uganda. Jacky's has been developing its electronics retail business in Dubai since 1988, operating its own brand stores selling a wide range of consumer electronics, as well as various home appliance and mobile phone brand stores in the UAE. Jacky's said that the demand for mobile phones, computers and headsets has soared due to the pandemic, which has changed to home work and classes around the world. As more time spent at home increases, many people take the opportunity to renovate their homes, along with appliances such as TVs, coffee makers, air fryers and vacuum cleaners.
Brand matters
Dubai's population has one of the highest levels of affluence in the Arab region. Brand effect is extremely important to the local electronics retail market, and the market concentration rate of many local products has increased significantly. Ten years ago, Jacky's stores would sell at least 7 to 8 brands of TVs at different prices and quality, but now they mainly offer 3 to 4 high-end brands. The same is true for devices such as cameras and laptops, where consumers tend to have a soft spot for certain brands and prefer to use well-known brands. Jacky's Samsung store has a similar situation. Mid-range appliances and equipment tend to sell better in many other markets, but Jacky's stores sell better under high-end brands.
On the other hand, the market for digital trend products and accessories has become more fragmented. The market pays more attention to quality and cost performance, creating development space for more different brands and products. For example, Apple and Samsung's smartphones no longer come with chargers, driving the development of the third-party charging device market. Because for consumers, they pay attention to practical functions such as charging speed and the number of USB ports, and are willing to try new brands that are not well known. Other accessories also have this trend, such as USB adapters, headphones, wearables and Bluetooth devices, especially for work and study purposes, users generally pay more attention to price and function, brand is secondary.
The future of retail
Despite the rapid growth of e-commerce in recent years, which has attracted a lot of attention, physical retail is still the main driving force for Jacky's sales growth, and retail sales continue to grow during 2020~2022. Although online sales increased by multiples, they still accounted for only single digits of total revenue, due to significant growth in physical retail sales over the same period. As retail moves towards omnichannel, the role of brick-and-mortar stores will change, but the importance remains. E-commerce will replace many of the functions of the store, and the retail store will become the brand building and service experience for consumers. That's one of the reasons why Jacky's runs Samsung stores on a single-brand concept, and if consumers have chosen a brand, they naturally want to be treated with the respect they deserve, and can see the full range of products under that brand in the store, without being disturbed by other products and promotions. Jacky's attaches great importance to the service element of retail, and all stores have service counters to provide repair, maintenance and other consulting services to provide customers with a satisfying shopping experience.
In the UAE, the role of large shopping malls is evolving, and in addition to being mass shopping venues, shopping malls are becoming increasingly important as entertainment functions. Outdoor temperatures in the UAE often exceed 40°C, and people stay indoors a lot of the time. Therefore, in addition to general facilities such as cinemas, food courts and play areas, in recent years, the mall has also offered more diverse experiences, such as virtual reality (VR) experiences, roller coasters and ski resorts. These malls are popular with locals and tourists alike, and the trend of retail and entertainment integration will continue in the future.
Tourism will continue to benefit Dubai's retail sector, with the increasing number and scale of large-scale international events in the region bringing many new opportunities. Expo Dubai, held in 2021, attracted more than 20 million visitors, brought in US$23 billion in economic revenue, and achieved a remarkable business recovery. The 2022 FIFA World Cup, previously held in Qatar, also attracted hundreds of thousands of tourists to Dubai, many of whom chose to live in Dubai and then fly to Qatar on match days. Dubai's infrastructure, hotels, flights, malls, attractions, etc. are undoubtedly enough to welcome international tourists and are benefiting from it. For example, in one of Jacky's busiest UAE stores, visitors account for 30%~40% of sales.
Sustainability trends
Jacky's electronics retail business clearly shows that consumers and governments alike are increasingly concerned about environmental issues. More and more people are now asking more about trade-in services, whether equipment is recycled or resold, and how to deal with e-waste, especially the younger generation.
The Dubai government has also done a lot to address environmental issues, such as starting to charge single-use plastic bags of about 6 cents each in 2022 to reduce environmental pollution. Jacky's has recently ventured into the UAE's packaged organic food trade to capitalize on the growing environmental and health awareness of the general public. In the Middle East, many organic food brands are targeting the high-end market, where expensive prices reduce the product's appeal to the mass market.
The Middle East is a blue ocean worth exploring and excavating, but there are considerable political risks in the region. Therefore, before investing in the Middle East, enterprises should observe the Middle East and familiarize themselves with the policies of various countries in the region. Middle East customers are a typical adventurous and conservative contradiction, if you want to open up this market, it means to pay more patience, with their own expertise to win the trust of customers.
As the second largest port in the Middle East, Dubai's generous duty-free policy and free trade economy make it the largest trade wholesale market for re-export to Africa and surrounding Gulf countries, covering a population of 1.3 billion, gathering merchants from nearly 30 countries in Africa to purchase daily use, light industry, electrical appliances, clothing and other goods here all year round. Usually, 75% of the import trade quota is re-exported to the African market, 20% is re-exported to the surrounding Gulf countries, and 5% is directly consumed in the UAE.
The main consumer group in the Middle East is mostly young people under the age of 30, who are more willing to experience new things, pay attention to personal expression, and hope to gain recognition through social media. Echoing this, social media plays an important role in driving consumer behavior and is the main marketing method that will drive the development of e-commerce in the region.
Most of the Middle East is a Muslim country, and generally pays attention to religious beliefs, because cross-border e-commerce products and packaging also need to pay attention to many taboos. For example, avoid putting products such as tobacco and electronic cigarettes on websites. In addition, the promotion season for Middle Eastern e-commerce is "White Friday" and Ramadan, which greatly increases consumers' consumption motivation, so they can also make preparations for commodity trade negotiations and logistics clearance as early as possible.