Tablets, smartphones to spur Jarir growth
Riyadh, March 22, 2011
Jarir Marketing, a leading Saudi office supplies and electronics retailer, expects higher sales of tablet PCs and smartphones to drive growth in 2011, its chairman said.
Muhammad Al Agil also told Reuters that the Saudi king's massive handouts, which include wage hikes, would provide a boon for retail sales.
"We expect good growth mainly driven by (sales of) tablets and we also expect strong growth in smart phones," he said. "We also plan to open four stores, three in Saudi and one in Kuwait, today we have 28 stores."
Jarir said in 2009 it planned to expand the number of its stores to between 40-45 stores by the end of 2013 with a goal of increasing sales to close to a billion riyals in 2012.
Al Agil projected Jarir would see gross margins -- which have been declining due to weak profitability on smartphones -- at 19 per cent by the end of the year from 17 per cent in 2010.
"We expect to get back. Last year, we had low market share and to have a good market share we had to dump our prices. Now we see that our margin is going to improve this year," Al Agil said, adding Jarir sold 158,000 smartphone sets and 19,000 tablet PCs in 2010.
"Now we have 10 per cent market share ... This will allow our gross margins to improve, may be 150 basis point. We expect to go back to a gross margin of 19 per cent from 17 per cent in 2010."
Jarir's 2010 annual profit rose 7.2 per cent to 401 million Saudi riyals ($106.9 million). Al Agil said the retail sector will benefit from Saudi King Abdullah's $93 billion in handouts, including wage increases, which will boost consumer spending.
"I think the king's statement means that this year will be a robust one in terms of consumer spending and economic activity," he said.
Asked whether he had any concerns that inflation may limit consumer spending on luxury goods, Agil said the young population would continue to drive growth.
"People treat their smartphones as a necessity, they are ready to pay around 1000 riyals for mobile charges, while they pay no more than 800 riyals for water and electricity and other stuff," he said.
People under the age of 30 make up two-thirds of the indigenous population of more than 18 million Saudis.
Shares in Jarir closed up 1.28 per cent on Monday. – Reuters
More Retail & Wholesale Stories
- Sennheiser unveils new microphone system
- Centrepoint opens 100th store in Dubai
- Panasonic to showcase top AV solutions in Dubai
- Alhokair eyes US, UK buys; plans debut sukuk
- 20 countries back Abu Dhabi jewellery show
- SanDisk launches 128GB memory card
- Canon launches 30x zoom PowerShot
- Bin Hindi unveils new 'Twenty20' sales plan
- Nokia tops UAE mobile handsets market
- Spinneys to set up distribution centre at Kizad
- P&G wins product innovation awards
- Xerox names MEA general manager
- India's Bharti group mulls Carrefour tieup
- Etisalat opens retail shop in Dubai Mall
- Ultra wealthy to spend more on luxury goods
- Kuwait group inks JV deal with China jeweller
- MAF in deal to set up retail academy
- Samsung, UPB sign deal to supply AC systems
- Samsung showcases latest UHD monitors
- Unilever named 'employer of choice' in Saudi
- New Nokia Asha range arrives in Bahrain
- Canon launches 2 compact B&W MFPs
- MAF to build new mall in Dubai IMPZ
- Big growth seen for Mideast retail sector
- Rosette, GoExport enter partnership deal
- Samsung opens new outlet in Abu Dhabi
- Epson launches new thermal receipt printer
- Utoor Perfumes signs deal with Mezaj Arabia
- UAE group opens supermarket in Bahrain
- Marks & Spencer opens big store in Kuwait