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 The
demand for computers and computer-related products and services
has registered a marked increase in Africa due to the ongoing process
of computerisation that is sweeping through most African countries
at the moment. The UAE computer market represents one of the largest
trading sectors in the country. Its turnover is estimated to be
almost at par with consumer electronics and electrical appliances.
The retail network for computers in Dubai is next in size only to
the network of foodstores, textiles, gold and electronics. The annual
turnover of this market is estimated at about US$1 billion per year.
Imports heavily outweigh both manufacturing and re-export activity.
Domestic demand for computers and related products forms a major
share of the total trade. A substantial portion of the domestically
sold computer hardware and software is bought by tourists, shoppers
and home-going expatriates, i.e technically re-exported. According
to trading sources, this may be upto 30-40 per cent of the total
turnover. Little wonder then that the UAE has emerged as the IT
centre for the Middle East and nearby markets.
SOME COMPUTER COMPANIES IN
DUBAI
>Microsim Computers
>Hatta Computers
>Memory Technology
>House of Memory & Processor
>Lunar Trading
>Mutex Computers
>Intertec Systems
Demand for computer hardware and software
has been increasing steadily since the mid-80s, but growth has been
particularly high during the 200-2001 period. The largest demand
is for computer hardware, which accounts for nearly half of the
demand. More than 60 per cent of the supplies are from manufacturers
based in the Far East. The re-export trade is overwhelmingly for
computer hardware destined for Iran, GCC, Indian sub-continent,
CIS and Africa. Re-exports to African countries has registered a
two-fold increase in the last two years.
In the last 10 years, the UAE has seen
the rapid development of a large computer trading and manufacturing
sector. A number of computer traders in Dubai have now started assembling
their own PCs for distribution in their re-export markets. Most
of the locally assembled PCs are catering exclusively to exports,
mainly to Iran, CIS, Africa and the Indian sub-continent. However,
with stiff competition and lower profit margins, UAE computer dealers
are looking to other markets. Africa has been targeted by UAE companies
as the next emerging market for computer hardware, software and
accessories. Large number of buyers from Kenya, Uganda, Tanzania,
Eritrea, Senegal, Congo and South Africa are seen buying large quantities
of computer hardware and accessories from the various computer shops
in Dubai. From printer cartridges to complete computer systems,
these African buyers are buying increasingly large quantities. Low
prices and the availability of a wide range of products are major
factors that have attracted African buyers to the UAE.
While the competition is open, in line
with the government's policy of free trade, the intensity of competition
has led to the UAE market becoming extremely price sensitive. The
stiff competition in the UAE has had its spin-off benefits for the
customers as the rates for computer hardware and software are amongst
the cheapest in the world. It is estimated that the UAE's computer
industry is growing at an average rate of 10 per cent every year.
The continued growth of the international IT industry can be gauged
by the fact that more PCs were sold worldwide than television sets
for the first time in 1996. The rising demand for computers in African
countries is attributed to the process of computerisation that is
currently sweeping across the Dark Continent. Government departments,
schools, private offices and homes - computers are gaining ground
all over Africa. As the drive for computerisation gains momentum
in Africa, demand has also registered a huge increase. Africa is
said to be one of the fastest growing markets for IT in the world
with an annual growth rate of more than 14 per cent.
To cater to this increased demand many
multi-national computer manufacturers are targeting Africa in a
big way. Microsoft has already opened a sales office in Nairobi
to meet the rising demand in East African countries. Microsoft has
over 25 offices in Africa and Bill Gates himself visited Africa
in 1997. African customers find the UAE market particularly attractive.
"In Uganda the price of a PC is almost double of what it is
in Dubai, says Jenie Birungi who had come to Dubai from Kampala
specially to buy computers for her office. "Even after paying
import duty in Entebbe, it works out to be much cheaper to buy from
Dubai," she said. Besides the price advantage, African customers
are also impressed by the wide range of products available in UAE's
computer stores. The latest models of of almost all major international
brands of computers are readily available in the UAE market besides
many new accessories and software that are not available in many
African countries. All these factors have combined to make the UAE
one of the best places to buy computers from - specially from an
African viewpoint. The computer sellers in the UAE welcome the African
buyers not only because they are bulk buyers, but also because they
pay cash for their purchases.
To further increase their exposure in
the African market, a large contingent of UAE-based companies will
be travelling to Uganda to participate in the upcoming 3rd Afro
Business Trade Fair in Kampala. The Afro Business Trade Fair is
considered to be the biggest event of its kind and will provide
UAE companies an opportunity to showcase their goods and services
in the growing East African market and to appoint dealers and distributors
for their products. Industry experts believe that the UAE computer
industry can benefit a great deal by promoting itself in the African
market rather than to wait for African customers to come to them.
South Africa has managed to gain a substantial share of the total
African market by launching a systematic and concerted drive to
attract customers from other African countries. The prices offered
by UAE companies, in many instances, are even lower than that of
South African products. Yet the lack of a co-ordinated marketing
and advertising campaign by UAE companies has resulted in a slower
rate of growth in the African market. The UAE computer industry
stands to gain a lot by promoting itself specifically in the East
African countries of Kenya, Uganda, Tanzania and Congo because of
their geographical proximity and the low cost of transportation
to these countries.
Participants at last year's Afro Business
Trade Fair held in Kampala were surprised at the overwhelming response
they received and some are even contemplating opening offices in
Uganda to further boost their sales in the East African markets.
With Dubai established as the distribution centre for the Middle
East region, it is well placed to meet the growing demand for IT
products and services in Africa by sourcing out of the Far East.
By linking the growing economies of the Far East with their markets
in Africa, Dubai is well placed to take advantage of its geographical
location and its infrastructural facilities.
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