Smartphone's holding the line
There is nothing like the present when your business is plugged into a tech format - smartphones - that is comfortably growing at more than 70 per cent annually. But what of the day after?
How can a business used to such high growth rates suddenly face up to the momentum slowing down to the mid-30 per cent or even lower? Such a turn of affairs has already happened in the global TV making business and has led to manufacturers and retailers scrambling for new ways to revive the business.
Gulf News spoke to Deepak Babani, CEO of Eros Group and distributor of the pace-setting Samsung line-up, on how he intends to cope with the highs and lows the tech industry throws up at regular intervals.
Gulf News: Are you already planning for a time when growth could stall on smartphone demand?
Deepak Babani: I quite honestly don’t see that happening any time soon. In terms of value, smartphones already make up 95 per cent compared to feature-phones. On quantity, the ratio is 70:30 in favour of smartphones and growing further, though slowly.
The next two years will have more content through apps so much so phones are now data tools. For all kinds of daily requirements I get things done online - I find it efficient and more people share the sentiment.
That’s one of the reasons why people have been changing smartphones so regularly. What was achieved in terms of processing speeds on computers over a long timeframe, we probably have the same or more in less than 18 months via smartphones.
Users want faster processors and are willing to pay for it. This will continue.
Gulf News: But will you add more lines within Eros Group to create other growth prospects?
Deepak Babani: Three weeks ago we created a home lifestyle division where the plan is to bring in new entertainment-related hardware brands into this market.
We intend to sell them in a different manner - through our own stores, select organised retail and by directly reaching out to prospective buyers. There are homes in Emirates Hills where owners could spend Dh150,000 on an in-house entertainment system.
Our new division hopes to create a presence by offering integrated solutions at Dh35,000 or more. The way we see it is bring in new products and build for the future. In three to four years, they could well be household names here.
For the present, our growth rates could be exponential but of a small base.
Gulf News: Eros is now focussed on full distribution rights. What’s with this emphasis?
Deepak Babani: When we talk to any new player the rights have to be for pan-GCC and East Africa. The full GCC rights should be there at the least.
We are now witnessing double the growth in the GCC markets outside of the UAE where we have distribution rights. It shows the huge potential distribution offers.
But I am not willing to get into a new market just to learn new things. I can be quite comfortable with the 30-35 per cent I am getting in markets where the representation is already there.
Gulf News: Eros has been on the lookout for an entry into Saudi Arabia for some time. Will the delay not hurt prospects?
Deepak Babani: We understand the longer we wait it will be more difficult. But there’s always a route - through a joint venture or acquisition.
If there is some Saudi entity that is mid-sized and seeking a partner we would show interest. There were talks in the past but nothing materialised.
Minds will have to jell and the price has to be right - at some point we will reach that point in Saudi Arabia.