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12 Oct, 2010 13:15

Electonics retailers look to rebound from horror recession

Electonics retailers look to rebound from horror recession

The Russian electronics and mobile phone retail sector was hammered by the economic and crisis during 2008–2009, and is only now looking to recover growth.

Electronics retailers were severely impacted by the economic crisis with some retailers reporting a 40% drop in rouble revenues during 2009.. The drop in consumer demand was down to the change in consumer behavior and drastically limited access to credit according to Miloš Ryba senior retail analyst in Planet Retail

“Eldorado reported a massive 42% sales decline in rouble terms during 2009 due to consumer crisis shock and decrease in spending. Banks were not giving a relevant support to this sector thus several market players went bankrupted or decreased their presence.”

Although, the electronics retail sector may bottom out this year and start to recover in the second half of 2010, Tigran Oganesyan, senior analyst consumer goods and real estate at Uralsib, says both M.Video and Media Markt are likely to come out of the crisis as winners

“M.Video and Metro Group’s Media Market did well throughout the crisis. M.Video added 19 stores while Media Market opened 6 superstores in 2009. The former reported a fractional revenue increase of around 2%, while the latter may have experienced comparable revenue growth.”

The crisis has also significantly hampered the leading mobile phone operators – Svyazonoy and Euroset. Miloš Ryba from Planet Retail says their 2009 revenues were heavily hit

“The dramatic sales decrease in 2009 was caused by several factors: Consumers became increasingly cautious in their discretionary spending; the mobile phone market reached a certain level of market saturation, at least in large cities; and consumer access to credit became restricted.”

Experts believe the electronic market will continue to recover from the recent postponed consumer purchases. Nevertheless, to attract consumers they will need to introduce new products or services says Tigran Oganesyan

“I think the internet shopping will gain its position on the retail market very soon. Thus, retail giants will face strong competition and will need to establish new services and manage prices.”