Kazi Najib Ashraf is a Telecoms Professional and a Blogger and he is a contributor to www.handelot.com, he can be contacted at kazi.najib@playtorium.com

So here we go again, the continuation of the story that we had started last week. There are so many aspects of this trade that as I write I keep getting inundated with ideas and find it hard to stop the fizz that keeps buzzing in my ears so I have to put forth a few observations before I delve in the subject. Please bear with me before I get into the details of the Trading Spots in the UAE. I would like to thank everyone for the emails, phone calls and the comments I have received for the earlier post. Let's keep this one interactive as well.

Ethnic Mix of the Trading Community: The "Trading Business" in the "UAE" is not only dominated but rather shared among just three distinct ethnicities.  Arabs from the Levant, Subcontinent (India and Pakistan) and Iranians. Western Europeans are almost non existent and so does every other nationality. This doesn't mean that there isn't a chance for anyone else but rather that this is what the region requires. English, Arabic and Hindi/Urdu are the languages of choice and this is how everyone gets by. A niche business of white branded Android devices is almost exclusively managed from traders belonging to mainland China. You would hear people conversing in new languages all the time, Hindar (Hindi+Arabic), Enghi (English +Hindi), Arang(Arabic+English) and finally Chinglish (Chinese+English) and maybe a bit of a flair of Chinar (Chinese +Arabic), pay a little attention and you would get acclimatized with the local accents and dialects. 

Seasonality: Mobile Business is generally evergreen but not the "Trading Business". The New Year Festival of "Nouroz" is celebrated in Iran and in the Kurdistan Region of Iraq. This is the most precious festivity of the Persian calendar and quite literally these countries are virtually shut from the 15th of March to around the first week of April. Jubilation and festivities in these countries bring gloom, sadness and palpitations to the Trading community in Dubai. The market ceases and nothing moves to a region that amounts to sometimes 40% of the trade. Chinese New Year has the same effect where shipments of hot items such as Samsung and Apple are stalled until the Orient is off the fireworks and products start getting shipped to China via Hong Kong, yes there is an export of products from Dubai to this territory as well. The third dates to remember are the Muslim Eid Festivities where shipments to Saudi Arabia gets stalled a few days before the event. If someone misses the shipment then they're stuck for at least another two weeks. Saudi Arabia also amounts to a major chunk of Mobile Business from Dubai. So again Nouroz for Iran, Chinese New Year for the Orient and Eid for Saudi Arabia are three events to remember if you are in this trade.

Now lets get down to the locations where these "Trading Events" take place which I have termed as "The Spots"

Dubai Airport Free Zone (DAFZA): This is where the game starts. Almost all deliveries of Mobile Phones enter the Freezone through the Freight Terminals of the Dubai International Airport that is co-joined with the facility. DAFZA as its commonly known is the Mobile Phones Warehouse of the Middle East and has several facilities. This is a bonded area and you would require an invitation from a company operating inside DAFZA to enter the premises. There are different types of facilities available at DAFZA. Mixed use warehouse and offices and dedicated office blocks with fully serviced buildings. There are three distinct business setups:

1. Logistic Companies: These companies manage stock for traders from around the world as well as for companies in the UAE. Companies using offices in the UAE (Inside or Outside DAFZA) also keep their stocks at the premises of these Logistic companies. Some of these companies also have the facility to receive payment on behalf of the customers. 

2. Large Scale Traders with own Logistics: Companies with sales volumes in multiple of 100k units and above every month (This is not a condition) use the mix use warehouses with offices for trading in the front and keep their stock at the rear of the facility as shown in the picture. This facility is quite expensive with rents upwards of 110k US$ per year plus other expenses so the business volume has to justify this expense. A point to note here is that all warehouses are full and there is a waiting line for new customers to obtain these facilities.

3. Trading Companies with only Sales Setup in the Local Offices: Several small and medium sized companies are spread across the office buildings in DAFZA. The reason for these companies to operate in DAFZA is the proximity to the Logistics companies as well as the Large Trading houses. Sales and Marketing personnel are seen regularly closing deals and the chatter inside the sales offices goes on until late evening.

The advantage of business in DAFZA is the ready availability of information and the speed at which deals can be closed. Products are transferred to the shipper and sent out to the customer's destination in a matter of hours. Most of the companies operating in DAFZA have International and Regional customers and to them speed is of essence. As mentioned in the earlier post, its Apple and Samsung that is currently occupying most of the space in the warehouses followed sporadically by other brands. Local traders have been dealing in SLR Cameras, Playstation and X Box Consoles also to populate the mix of the product offering. So if you are an International player planning to enter the market then quite simply contact one of the logistics companies and you can safely keep your stock at their premises and trade.

Nasser Square (The Old Souk of Dubai): If DAFZA is the Central Regional Warehouse for Mobile Phones of the Middle East then Nasser Square is its Showroom. This is where it had all started from. The heart of Dubai's old souk still hails as the central attraction for tourists from around the world. It also has a romantic aura and a confluence between the old and the new. You would stroll through the aromas of eastern spices and the clinking of steel pots and pans, walk through the textile markets and in between appreciate the aromatic wonders of Arabic cuisine finally reaching the blue waters of Dubai creek with towering wooden boats called the Dhows. These traditional boats carry everything from cars, buses, refrigerators, air conditioners, spices and mobile phones to far off places in Africa and the Sub Continent. The absolute domination of business in this area is also that of Mobile phones and you just can't miss it. There are mobile phone shops everywhere selling branded, unbranded, used devices, accessories and spare parts. 

Nasser Square caters to the regional as well the local retail and wholesale business within the UAE. The retail mobile sector in the UAE is categorized and broken down in numbers as follows:

1. IR (Independent Retailers; Souk Shops): 750 outlets across the Country

2. KDR (Key Domestic Retailers; Organized Retail): 300 outlets across UAE

Consumers living in the UAE usually shop in malls and mostly miss out on great deals available in the hundreds of IR outlets across the country. Mobile phones are atleast 10% cheaper in IR shops but we are just spoiled by the convenience of shopping at the malls ignoring a host of choices, price gaps and a great experience available at these outlets.

Wholesale customers from across the GCC (Oman, Qatar, Bahrain, Saud Arabia and some Africa countries) buy and carry the products with them by road. Other customers purchasing larger volumes are directed to their warehouses in DAFZA where the deals are closed.

Almost all large and medium volume dealers have an outlet in Nasser Square with a facility in DAFZA as well. Its sort of a status symbol to have a place in DAFZA especially if its with ones own warehouse.

Shops in the back alleys of Nasser Square such as Al Musalla street are teaming with Chinese companies selling white branded Android and feature phones. There is also a market for used and graded mobiles especially a range of Iphones and high end Samsung devices. The shops in this area cater to the same set of regional customers as mentioned above and you would see devices, accessories and packing getting split on the roadside for easy shipping to destinations.

Products are causally shipped within shops on manual trolleys as pictured above, there are 200 Sony mobiles worth atleast 100,000$ on this trolley and this gentleman is chatting away casually as he is carrying a bunch of groceries. The amount of cash and products that run along the tracks in this area is mind boggling. Screeching sound of duct tape tearing away the already high pitched voices of traders announces a closed deal and product being wrapped on a trolley to be taken to its destination. 

Gargash Center: The Grand Central Epitome of Mobile Trade, Gargash Center is the hub of Nasser Square's Mobile Phone activity. Although a lot of shops selling security solutions have spring up but the building is known for money and power all emanating from the mobile phone trade. The pros have their offices there and the newcomers treat it as their training center rubbing shoulders with the greats.

Frij Murar: A little walk down Nasser Square crossing Al Musalla Road we come across another Grand Market right opposite Deira Hyatt Regency Hotel, this is the famous Frij Murar Street again teaming with Mobile Phone Shops. The highlight of this area are the Accessories and Spare Parts shops dealing with an unlimited variety of known and unknown brands.

The Accessory Kings

The Main Mobile Market - Frij Murar

Spare Parts Market in the back alleys of Frij Murar

The Long Back Alleys of Frij Murar

 So here we are at the end of our tour to the local market and the spots that are the cardio system of the Middle East Mobile Industry. I might be repeating this issue but the shelf space in majority of these outlets are occupied by Apple and Samsung. I said majority and not all so don't take me wrong, other brands are struggling for shelf space and some like Huawei are pushing in to some level of success. The scary part is that I haven't heard anyone raising an alarm about so many businesses trying to survive on these two brands. Sanctioned markets are opening and the once "Granted" business would simply flow directly leaving a lot of people gasping for breath. This is not just about the business owners but also the many people associated with this trade. This is a time for a major introspection to see where the market is heading and what are the alternates. Remember VCR, DVD Players, Cordless Phones; those technologies once drove similar markets and now nowhere to be seen.

I spent 10 years working for the regional office of Siemens Mobile across Middle East and Africa and the experience was no where near of  what I learned by walking the streets of Nasser Square. The real market exists in these quarters and I would urge anyone working as a supplier or a technology enthusiast or even if you would like to venture into the realms of entrepreneurship to take a day trip here and see for yourself how the earth real goes around.

In the end I came across a Mobile Phone shop at a prime location at Nasser Square; I can assure you that only the key money for obtaining this outlet would be in the range of 1 Million $ and above. Now the owner of this shop was either in a hurry or ran out of names or is a visionary zen master whose soul purpose of taking over this outlet was to warn his fellow traders regarding the bygone days of mobile trading and a true hope for them to find alternate industries for their long term survival.............................You take a pick and see below.................

 I hope you enjoyed this journey and we would meet soon with the details of the local traders and the markets of interest.

Looking forward to your comments. Happy Trading

Kazi Najib Ashraf is a Telecoms Professional and a Blogger and he is a contributor to www.handelot.com, he can be contacted at kazi.najib@playtorium.com