Labor crackdown rings in trouble for mobile market [Arab News (Saudi Arabia)]
(Arab News (Saudi Arabia) Via Acquire Media NewsEdge) Jeddah: Abdul Hadi HabtoorThe crackdown by authorities on undocumented expatriates has taken a toll on mobile phone sales in the Kingdom, with retail stores claiming that the drop in sales was as much as 50 percent in the past one month.
Shopkeepers attributed the steep fall to the fact that expats, including illegal ones, accounted for a major slice of their clientele. Another factor for the collapse in sales, they say, is the state of fear among wholesalers since many of them, though legal residents, are involved in proxy businesses — non-Saudis making investments under the names of Saudi nationals.
"They are afraid of being questioned about the large amount of money involved in their businesses, which could lead to the discovery of their proxy trade. Nowadays, their supplies to us have shrunk drastically," said a retail trader.
Contrary to what is perceived by many, the percentage of Saudi customers in these shops is "insignificant and has no real impact," 27-year-old Ayoub Muhammad, who runs a shop north of Jeddah, said, adding: "Our sales were affected during the amnesty period; now the business is paralyzed." Stating that it was a flourishing business earlier, he said: "I think over 70 percent of our customers were expats. Many of them used to purchase more than one phone, many changed their phones every month and many bought mobile phones for their kids." Muhammad believes that if sales remained at current levels, many shops will have to pull down shutters. Customers say that despite all this, prices of mobile phones remain the same.
Rami Al-Salami, owner of a mobile phone retail shop, was optimistic despite the declining sales. "The negative impact on our sales is only a temporary phase, and we are sure that it will return to normal eventually. Saudis will have a larger space in the market," he said.
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