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Eye of Dubai
Business & Money | Sunday 21 April, 2024 10:20 am |
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Jarir lowers prices to ensure strong market share: Chairman

Jarir Marketing Co. (JMC) continues to boost its market share, which will result in further growth, Chairman Muhammad Alagil told Argaam.

 

He added that Jarir reduced prices to ensure an increase in its market share amid fierce competition in the retail sector, leading to a decrease in profit margins for various products.

 

"It is uncertain whether the company will continue to reduce prices," the Chairman noted.

 

He referred to pressure on consumer purchasing power due to higher prices and additional needs such as entertainment.

 

Jarir's market share, according to various sources, is growing, as Jarir is considered the largest retailer of laptops and smartphones in the local and GCC markets.

 

Commenting on the reasons behind the company's growth pause, Alagil said Jarir is a major company with a leading market share and sales of more than SAR 10.5 billion.

 

He added that when Jarir records additional sales of SAR 400 million, despite being sizable, will only constitute nearly 4%. "Therefore, the sales growth will be moderate due to the company's large size," the Chairman noted.

 

Jarir intends to open four new stores, three in Saudi Arabia and one in Qatar, which will add more than 300 new jobs for citizens, Alagil said, confirming that the company targets a total number of branches ranging from 70 to 90 over the next five years.

 

Regarding Q1 2024 financials, the Chairman said the company recorded robust sales growth from its operations in the GCC countries, leaping by 36% in the three-month period. Jarir store sales also grew by 8% compared to the same quarter of the previous year. However, e-commerce sales dropped by 28% year-on-year (YoY).

 

Wholesale and corporate contract sales also fell by 25% YoY, leading to a slight decrease in the retail sector by 1%.

 

Alagil attributed the decline in e-commerce sales to customers' preference for purchasing from stores after the 'Buy Now, Pay Later' (BNPL) service was applied, noting that e-commerce sales recorded approximately SAR 2 billion in 2023.

 

Financing currently accounts for more than 20% of the company's total sales, with 60% of it allocated to the BNPL service and 40% for microfinance.

 

Replying to a question about the dividend policy and the possibility of adding young members to the board of directors to keep up with market developments, Alagil said that five out of eight board members age between 39 and 50. They represent a group of young individuals with very good expertise. As for the founding members, they are the veterans trusted by investors.

 

“We expect high dividends to continue and to increase by almost 100%,” he added.

 

Jarir’s profits dropped to SAR 219.3 million in the first quarter of 2024, compared to SAR 247.8 million in the year-earlier period, according to Argaam data.

 

 

source: argaam

 

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