Acer ex­pects rise in com­mer­cial sales to drive growth in the Mid­dle East

▶ Tai­wanese elec­tron­ics com­pany ex­pects to gain larger mar­ket share in Iraq and Egypt

The National - News - - BUSINESS - ALKESH SHARMA

Acer is bullish on the growth prospects of its com­mer­cial busi­ness in the Mid­dle East and Africa, as the elec­tron­ics gi­ant looks to ex­pand its pres­ence in emerg­ing mar­kets such as Iraq and Egypt.

Con­sumer busi­ness, how­ever, is ex­pected to re­main flat due to de­clin­ing de­mand for per­sonal com­put­ers, ac­cord­ing to the com­pany, which is based in Taipei. Acer ac­counts for close to 6 per cent of global PC sales.

“The re­gional con­sumer mar­ket, in­volv­ing PCs, is flat or even slightly de­clin­ing in some mar­kets since [the] past cou­ple of years. But our com­mer­cial or B2B seg­ment is go­ing very strong,” Em­manuel Fromont, Acer pres­i­dent in Europe, Mid­dle East and Africa, told The Na­tional.

“Iraq has shown good busi­ness cor­rec­tions in the past eight months … es­pe­cially in the high-end seg­ment. Cash is avail­able in the mar­ket and there is also a struc­tured ap­proach. We are also work­ing with some of our Dubai part­ners to ex­pand into more Iraqi ter­ri­to­ries,” he added.

Acer ex­pects a faster rise in Egypt, the most pop­u­lous coun­try in the re­gion, driven by its “young pop­u­la­tion” and com­par­a­tively sta­ble cur­rency.

“Egypt is slightly more sta­ble than Iraq … it is do­ing very well at this mo­ment. We have es­tab­lished re­tail part­ner­ships and dis­tri­bu­tion chan­nels and the same growth model will be repli­cated in Iraq in the com­ing months,” said Mr Fromont.

Acer will in­vest “ag­gres­sively” in Egypt and new emerg­ing mar­kets in the re­gion, Mr Fromont said.

Over­all, the UAE and Saudi Ara­bia – the Arab world’s two largest economies – are the best-per­form­ing mar­kets for Acer in the MEA re­gion, while Rus­sia is top per­former in Europe. Last year, the UAE and Egypt both saw 15 per cent an­nual growth in sales, whereas Saudi Ara­bia grew by al­most 10 per cent, the com­pany said.

In the com­mer­cial seg­ment, the ed­u­ca­tion in­dus­try and small and medium-sized en­ter­prises are Acer’s big­gest clients in the re­gion. The com­pany draws more than $2.8 bil­lion (Dh10.3bn) in rev­enue from Europe, the Mid­dle East and Africa per year.

Nearly 35 mil­lion fewer PC de­vices – in­clud­ing desk­tops, lap­tops and tablets – will be shipped glob­ally in 2023 than the al­most 407 mil­lion in 2018, ac­cord­ing to re­search com­pany Statista. That com­pares to more than a bil­lion smart­phones shipped last year.

How­ever, Acer sees huge growth in the re­gion’s gam­ing in­dus­try. Its over­all mar­ket share in the con­sumer busi­ness is close to 15 per cent in EMEA, but in gam­ing alone it is al­most 20 per cent. “We have a dual-brand strat­egy in gam­ing. For ex­am­ple, for heavy gamers, we have a high-end range and for ca­sual gamers, we have a more af­ford­able range. This strat­egy has helped us to en­hance our mar­ket share and rev­enues,” Mr Fromont said.

In the first half of this year, Acer saw a 46 per cent yearly in­crease in rev­enue in the Mid­dle East across its gam­ing plat­forms and a 41 per cent growth in vol­ume.

Acer, whose net profit fell 54 per cent year-on-year to 408.8 mil­lion new Tai­wan dol­lars (Dh49m) in the sec­ond quar­ter, ex­pects a surge in re­gional busi­ness once geopo­lit­i­cal con­di­tions im­prove.

“There is a huge de­mand but con­sumers are lit­tle cau­tious while spend­ing. Once there is more sta­bil­ity and no in­sur­gen­cies … busi­ness will grow man­i­fold,” said Mr Fromont, adding the same hap­pened with Rus­sia.

“The Rus­sian mar­ket went through a tough time but it is sta­ble now and our best per­form­ing mar­ket in Europe. We see sim­i­lar po­ten­tial in MEA.”

Getty

Acer says con­sumer busi­ness is flat as de­mand for per­sonal com­put­ers con­tin­ues to de­cline

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