By Deepak Babani
Retail and hospitality: Electronics will grow bigger and faster, but not yet
This year has not been great for the electronics sector. Eros Group has only grown five percent in 2017 compared to last year. Sales have been flat partly due to the geopolitical situation in the region, which remains unclear. We expect the first half of next year to be difficult as well, with the introduction of Value Added Tax (VAT). But once people get used to the five percent charge, there will be more growth in the industry. We expect bigger growth margins in 2019-2020, when new technology such as the Internet of Things (IOT), Artificial Intelligence (AI), Virtual Reality (VR) and wearables have picked up.
One problem with these technologies is they have not developed enough, and still exist in several formats. This makes manufacturers, who want to make the products in large quantities, confused as to which format will be the worldwide standard.
Another issue is the cybersecurity concern. If I have an electronic lock, for example, can somebody hack into it my system and then my house? While these fears are currently being addressed, they have not yet been solved.
However, improvements are already being made. In the next three to four years, there will be a big leap in electronics, where we will see as much as 50-60 percent growth.
AI is also moving fast, and will be used on everything and anything, whether it is banking, retail or hospitality. The centre of it all will be mobile, which will continue to grow. But technology will not be limited to electronics. Once the internet speeds up, life will be more automated. You will not have to use your mind to complete small chores. Your coffee machine will start on its own; your television will give you the weather and traffic report. Everything that you do will be driven by technology.
As for markets, the UAE has always been the base for us. The government itself is quickly moving into electronic projects, whether its road transport or government services. All these areas will be promoting the electronics business. So the UAE will continue to be a strong market, but places such as Africa are also getting more accessible. If you want to set up a telephone network in Africa, it is mostly wireless. Not having to lay down any wires makes everything less capital intensive and technology adaptations will be faster and cheaper. Dubai and neighbouring countries will be able to transfer technology and benefit from demand created in those areas.
Overall, the future of technology is going to move at a much faster pace in the next ten years. You will not survive if you take a back seat. Now is the time for the younger, tech savvy generation to continue to implement technology into all and any kind of sector, and they will do it faster. If we took 20 years to be successful, they will only need 10 years to do the same, and more.
The rate of change in technology is not well supported by retailers in this region. Retail store are the final touch point where end consumers going to experience these technology. Be it AI, VR and IOT all these emerging technologies needs high level of customer experience. Bringing the experience of these set of products to the highest level to the end consumer will shape of Electornics Retail in this region.