Hope you’re enjoying the journey to the mobile world in the Middle East, we will now delve into the source of supplies into the region and the markets being addressed.
The Gray Market in Consumer Electronics is unlike any other business especially because of the volume as well as the value. Product quality enhancement and ease of border regulations has made this phenomenon all the much easier. Mobile Phones in the Consumer Electronics trade is the widest and most common commodity to be moved across continents in large volumes. Issues such as Currency Fluctuations, Shortage of Stock of a particular brand, New launch etc are some of the factors that create a spike in the inflow of goods. This is not a must as most of the International Exporters traditionally keep goods in DAFZA with the Freight Forwarders as a general trend of their business.
There are 2 terminologies that every bidding trader or person of interest should know to be in the Mobile Phone Business. When I first ventured into this scene I had no idea what these two terms meant and had to struggle initially to figure these out as these are used so commonly, asking about these would have put me in an awkward situation. Here you go:
WTB: Want to Buy (You are looking for a product or a mix of products, the model, colors and required variants are also mentioned at times. This is also done to get the market info and you might not want the products.)
WTS: Want to Sell (You have a particular product to sell or else you are just trying to gain the market knowledge. This is also done if someone gets to know the stock of another trader and broadcasts this message as if the stock belongs to him.)
WHENEVER WTS IS MORE THAN WTB THEN YOU KNOW THAT THE MARKET IS DOWN. THIS IS THE CASE NOWADAYS AS WELL.
Attention: Sending too many of these messages as a middle man without having anything to buy or sell creates a clear impression that you’re a punter and no one takes you serious after a couple of broadcasts so use this service with caution. The standard tools used for the broadcast are WhatsApp, Skype, Telegram and at times email.
So how can traders figure out who the suppliers are? Where are they located and what stocks do they carry? In the past this was a challenge but technology has changed the landscape and access to information has been made easy by online marketplaces. Two aggregates; www.handelot.com and www.gsmexchange.com are perfect online resources to connect the buyers and the sellers. These sites come with a paid subscription and request the new entrants to bring in 3 recommendations from the market to enroll them on the site. Once connected you have a personal online assistant plus people that you can speak to directly to gain an access to a host of suppliers all over the world. Regular broadcasts on these B2B sites are also popping up every second with the names, contacts and locations of the suppliers. If utilized properly these sites are a treasure trove of information for the business. In order for you to get the maximum benefit its imperative that you have someone dedicated in your business to keep scanning the system and contact the suppliers asap as hundreds of other traders are doing the same. Time is of essence here and any lag would get you to lose the stock position.
Once you get to know the contacts you can then start chatting to them online and the aggressive players in the market are able to scoop good stock even before it gets registered on these sites. A mistake usually made is to just subscribe for a year and take down the contacts as more suppliers and buyers are added every year.
IT and Electronics exhibitions are held globally and these are another good venues for meeting the traders. Well after a while the same people are meeting across the world but what the heck its a lot of fun anyway.
One of the best sources for product information is www.gsmarena.com, this is a site with details of every running product in the market and the only downside is that it is only available in the English language. The site is clean and has an exhaustive list of products and features. This is not a trading site but a general snapshot of the Industry. An interesting feature is the daily stats of the top brands by interest and by fans as shown below. As Apple has not launched or announced any product in Mobile World Congress this year so there is no “Interest” in Apple phones. However, Apple is still the number one traded brand in DAFZA at the moment.
IMPORT LOCATIONS: Products are shipped to DAFZA from these key locations (There are other places as well but these are the top picks):
- Germany (Berlin, Munich and Bonn) / Denmark / Switzerland
- Poland / Czech Republic
- USA (Miami, New York, Chicago, Houston)
- Hong Kong / Singapore / Taiwan / Japan / Australia
EXPORT LOCATIONS: Products are shipped all over the world from DAFZA but the top export locations are:
- Saudi Arabia
- South America (A lot of LG Phones are shipped to Latin America)
90% of all Imports and exports hover around Apple, Samsung and Huawei. Samsung has been trying very hard to curtail the gray market by making “Regional Locked” products that would not work in certain countries at the first activation but hacks are available for these. Apple has also been encouraging the CPO (Certified Pre Owned) business providing 1 year warranty on factory refurbished products. This is being done to cater to the sub 500$ and 400$ market. It has been a raving success all across Middle East, Africa and the Sub Continent.
Recent loser of the global trade is Sony as there is almost no demand of this product / brand anymore and unless the company is able to pull something surprising from their sleeve they will be destined to the filing cabinet within this year. Tablets are also withering off slowly and the off take is not as good as it used to be.
So this is how simple the business is on the basics, you form a company in the free zone, get a couple of sales people and contact the suppliers world over, get your set of customers and that’s all you need!
Have fun and see you soon with more information.
A special thanks to my friend Mohammad Ishfaq of Euro Telecom for the consultation on this article.