Counterfeit products hurt mobile phone retail market
A report reveals that mobile phone retailers in the UAE are being hit by a growing counterfeit market and called for new measures to stop imports and sales of fake goods.
The study by the Dubai Chamber of Commerce and Industry, has also found that customer service is costing companies an increasing amount as sales of smartphones rise. “After-sales service and customer satisfaction are key issues confronted by mobile phone retailers, and companies end up spending a lot of money and resources on customer care and satisfaction,” the report said. “In spite of much care and attention, most of the retailers frequently meet with controversial claims and complaints which not only ruin the image of the retailers but also minimise their profit levels.”
On the issue of counterfeit goods, the report said: “Many fake mobile handsets find their way into the domestic market and the authorised agents and dealers have no control over this inflow. “Though there is a very clear Commercial Agencies Law that prohibits all counterfeit products in the UAE, the grey business continues to flourish throughout the country. To this end, some far-reaching measures are required.”
But the study also revealed that mobile phone sales in the UAE are expected to achieve a compound annual growth rate (CAGR) of 5 percent to $414 million in 2015, up from an estimated $349 million in 2011.
It found that at the end of 2010 there were about 10.9 million mobile phone subscribers in this country, for a market penetration rate of 231 percent. The mobile phone handset penetration is expected to grow from 238 percent in 2011 to 257 percent in 2015 and revenue from sales of personal digital assistants and smartphones is projected to surge 139 percent during the same period.
According to a Business Monitor International third quarter report for 2011, the UAE has one of the fastest growing markets for the handsets and accounts for nearly 10 percent of consumer electronics spending. Many fake mobile handsets find their way into the domestic market and the authorised agents and dealers have no control over this inflow.
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