News Column

"Gray market" of mobile devices retreats

April 29, 2014

BAKU/29.04.14/TURAN: According to the State Statistics Committee, the total number imported in January-February of mobile phones was 8680 in the amount of $ 723,500. In absolute terms it's 49.74 % lower than in the first two months of last year. In value terms, as there was a decline - by 16.24 %.

As Turan was reported in the company Integral (official distributor of Samsung in Azerbaijan and the lead partner of the local mobile operator Azercell), a decrease in imports is due to the reduction in the number of participants of foreign trade operations in this segment. They began to pay more attention to product quality - if in 2010 the share of the "gray market" was up 70 %, now thanks to mobile operators and MIA, the number of vehicles sold with fake codes PIN decreased to 30-35 % and continues to decline.

Citizens are informed about ways to combat counterfeiting and try to spot check the goods on the "purity" . In addition, frequent lawsuits against dealers and private sellers in fact unfair trade , which affects their reputation and sales.

The greatest progress has been made in the mass sales of the brand Samsung phones and Huawei, displacing Nokia. So, only the company Integral has 450 official dealer facilities in the country, selling an average of 700 units per year ( in Baku , the figure is 2.5 times higher in the regions , except for the cities of Ganja and Sumgayit, as much below ) .

Share of smartphones in the market in January-March 2014, estimated the non-governmental Centre for Economic Research (CER) was 59 % in monetary terms and in terms of quantity - 41 %. Win devices on android platform is about 90 % in value terms , and devices for Windows Phone have a share of 9% , the rest of the system is 1 %.

About 60% of smartphones sold accounted for devices with a SIM- card, 39% - with two devices, and 0.5 % - with three SIM-cards. Most (40%) sold out smartphones with screen sizes of 4.5 inches , the second (37% ) location - a 5-inch diagonal , the rest of the niche (23% ) took the device with a diagonal of 4.5 to 5 inches. Buyers , unlike last year, ignoring smartphones 4 inches diagonally.

According to independent experts , if the "gray" market lost ground , "shadow" market is booming. His dominance is observed just in the smartphone segment and other expensive equipment. This is due to constraints of suppliers at customs and other fiscal authorities. But it is also temporary - says Ghalib Togrul, CER chairman. According to him, from legitimate sellers have several advantages, including the sale of goods by installments , working with official representatives of producers in the region , the warranty period , and so on . "If earlier the dealers were unhappy with the difference in the cost of selling the same company Integral devices compared with the black market since the beginning of 2013 such complaints were not even in the CER and other members of civil society," - said the head of the NGO .

Previously , he said , the price difference between mobile phones formal and informal market was up 60 % due to the components delivered from abroad, for which the price is much lower than the finished product . Now, the largest producers have offices in Azerbaijan, because price difference on the "white" and "gray" products is about 15% . This is acceptable , and the buyer is easier to make a choice based on the range of services and guarantees.

Companies did not disclose the amount of profit in this segment , but the expanding dealer network suggests revenue growth for not cutting weight buyers. According to the State Statistics Committee , in 2013 the country imported 94,578 mobile phones in the amount of $ 4,192,900 ( each worth an average of $ 44.3 ) . A year earlier, imported 187,500 mobile phones in the amount of $ 9,468,400 (average $ 52).

By the beginning of 2013 there were 1,331,300 landline phone and 9,634,600 mobile numbers. - 17D-

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Source: Turan Information Agency (Azerbaijan)