Handelot ambassador Kazi Najib Ashraf

The new Middle East trading paradigm

2018 ushered in a new era in the wonderful world of mobile trading in the Middle East; I like to call it the 3rd Dimension after the introduction of VAT in the UAE. Things have changed for the better and there have been significant moves towards the normalization in the trading landscape. As you read this article on the Handelot Newsletter, I would urge the International Trading community to keep a close liaison with your account manager to re-establish and verify your contacts in the Middle East. Handelot keeps a keen eye on the market dynamics and is a great forum to ensure the security of your stock and the capital engaged. Here are the highlights that have shaped the business dynamics:

Move within the Freezone: As the VAT kicks in and the direct implications are for the “Local Market” trading for the walkin customers (Bulk International Buyers), there is a Mass Migration of Traders to the Dubai Airport Freezone. Local market trading is no more feasible and playing around with the invoices would have long lasting repercussions, the authorities in Dubai are truly vigilant and the online system is quite robust to keep track of any fraud. Re-Export business for traders in the region is currently restricted because of specific neighbouring countries issues but new International markets have been identified such as South America. Being in DAFZA provides a seamless flow of stock but with so many traders making a move here, the eventual results would show after a couple of quarters.

Strong In-Country Distribution Opportunities: As Apple and Samsung still rule the Trading arena, the second and third tier brands have started to push and exert their efforts towards the local end users. Sony, Motorola, Nokia, HTC, Oppo and Xiomi are clearly visible. In addition to these the third-tier brands have also been focusing on the KDR’s and IR through direct and Van Sales. With the reduction of grey stock in the local market, this would encourage the market to experience the almost defunct brands and in turn would also fuel their trading in the long run. I am sure that in the next 9 months there would be an increasing requirement of non-Samsung / Apple products from across the Middle East. As 40% of all trading still revolves around feature phones, Alcatel has started to gain speed after Nokia in this vertical. There is a clear space for more players in the quality feature phone sector.

Mushrooming of Logistic Companies: Several logistic companies have sprung up after the VAT implementation and more are opening. The reason is simple, the traders would like to keep the stock secured and there would be a lack of space soon with the established players. However, companies like Captain’s Freight, Union Logistics, AJ Logistics, Universal Logistics etc still lead the pack with an established name brand and robust services and processes. I would again urge International Traders to check with Handelot as well as the above mentioned Logistic companies regarding the health of the business of your new customers.