Jumbo Electronics considering acquisitions [Gulf News (United Arab Emirates)]
(Gulf News (United Arab Emirates) Via Acquire Media NewsEdge) Dubai: Jumbo Electronics, one of the leading multi-branded retailers in the UAE, is going in for medium-sized acquisitions programme this year to fuel group's growth. The group is also planning expansion of its retail and distribution network as consumer electronics industry is expected to grow at a robust pace.
Gulf News spoke to Vishesh Bhatia, Jumbo's new CEO, who held senior positions at Al Futtaim Group before moving to his new job. Joining Jumbo is Bhatia's second tenure with Jumbo, having worked from 2001 to 2002 as Chief Operating Officer there.
Gulf News: Tell me about Jumbo's performance in 2012
Vishesh Bhatia: For Jumbo, the year ends on March 31. For the first nine months, we have recorded more than 25 per cent growth in business and it has been much better than last year.
Q: How do you see 2013 for Jumbo
A: We are pursuing a growth strategy. It covers not only the UAE but also in the Gulf. Two weeks ago we have appointed a senior official to head our international business. We've just been done with formulating our two-year growth strategy and await board's approval. We are very bullish on the UAE market.
Q: What are Jumbo's expansion plans
A: We are planning a big expansion this year starting from Oman, Kuwait, Qatar, and Bahrain and especially so for the UAE. We have 24 outlets in the UAE and 28 across the Gulf. We are also looking at medium-sized acquisitions for diversifying our portfolio. It could be from the UAE or from the Gulf. We had discussions with some prospects. I would like it to happen this year. It can be from outside the electronics industry also and we are seriously looking at opportunities. It is being formulated and I will let you know when we sign a deal.
Q: What are the challenges and opportunities you see this year
A: Genuinely speaking, the electronics and technology business is an odd one. Strong demand on the top line but the margin business is severely challenged. The consumer electronics industry is growing in certain segment; smartphones are the biggest, followed by tablets and gaming. Laptops will be a little challenged because of media tablets. White goods are almost steady. We look for 15-17 per cent growth in next fiscal year.
Q: How do you see the consumer electronics outlook in the UAE
A: The industry will register only a single-digit growth compared to the boom days. Now it is cut down to four or five big players in the market. I always question whether private-labelled brands have a role to play. In old days, private-labelled brands had a role to play because of price gaps, but now it has narrowed down a lot and only some are surviving. Some low-end tablet vendors are making business by exporting to African countries. For us, 70 per cent of our tablet business comes from Apple. Serious buyers will not go for private-labelled brands. The role for OEM brands will get tough down the line, but I see a market for Chinese branded products like Haier. Many branded vendors from China will be there in the future.
Q: Which are the products that are going to fuel growth
A: Smartphones, no doubt, will be the main product. Our biggest business is not retailing, but it is distribution. We are the Sony distributor in the UAE and we are also strong on the IT division. SIM card activation is a very big business for us.
Lately, our biggest growth is coming from B2B [enterprise business]. We sell total solutions to enterprises. We are going to make some serious investment and alliances in B2B solutions. We want to get away from the routine stuff and focus on the core businesses to fuel growth.
Q: Sony and all major Japanese vendors are suffering in the consumer electronics market. How do you see Sony down the line
A: Sony will be focusing on three sectors gaming, digital imaging, TVs and mobility. They are launching a great line of Xperia mobile phones. Sony is right there at the cutting edge and they still do great sales across the world. It is tough but they are there. They have a great engine [Bravia] that drives the TV picture quality. Our target for the end of March is to sell 100 units of 84-inch Sony 4K Ultra-HD display TVs in the UAE. Now Sony is taking the 4K technology to cameras. The new Sony chief is trying to make cross pollination across its products.
Q: How do you see the demand for touch-screen devices running on Windows 8 going to spur growth in PC demand
A: With innovations such as the combination between Windows 8 and touch-screen control, vendors will be able to make breakthroughs and I see strong demand for touch screens. Microsoft's Windows 8 is a new system that consumers must learn and the learning process will prevent the operating system from taking off quickly. Touch-screen notebooks will continue to rise and eventually surpass that for traditional notebooks and become the mainstream in the market. The convertible laptops which can be used also as a tablet will be the product to look out for.
Q: How do you see this year's Dubai Shopping Festival doing
We predict single-digit growth this year. There is money in wallets but how much would they spend Those who wanted things bought it during Gitex; and throughout the year we had offers in the UAE. We see visitors coming through the Dubai Airport and the statistics show an increase in hospitality industry. We are investing more than a million in this DSF. There are very good offers this year.
Q: After taking over as CEO, have you fulfilled your targets
A: I work on 100 day plan. I have fulfilled my targets. I am in the second round of next 100 day plan and we are in the middle of budgeting exercise for the next two years. I am quite happy with what we have achieved.
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