Gadget spending on the rise

CEBU, Philippines - Spending on technology gadgets continue to grow, despite the perceived financial crunch, both in retail and corporate markets.

Ng Khai Development Corporation president Wilson Ng said that consumers are still investing largely on technology, although consumers’ preference has now shifted to cheaper product alternatives.

Ng, whose company is into distributing technology products both to retail and wholesale corporate markets, said that at this time and age, consumers consider technology spending as one of their necessities.

“We do see that people are now keen to look for value, and it’s particularly the lower end, like netbooks and gadgets that are selling well,” he said.

Although, in the first quarter of this year, sales of technology tools both hardware and software products had experienced a slowdown, this is quickly offset by encouraging growth posted in the second quarter of this year.

He said some industries may be affected than others. Industries like furniture and electronics is still slowing down, but segments like retail and BPO are growing. Thus, corporate sales have sustained growth although other sectors have been adversely affected by the global meltdown.

“Both retail and corporate markets are still growing. A big part of our sales still corporate, but retail is growing in faster percentage, maybe because it comes from smaller base,” Ng added.

Ng Khai’s retail arm the NGenius chain of stores in Cebu posted stronger growth despite the crisis.

“OFWs [Overseas Filipino Workers] are still sending money, and therefore, there is still some sectors of population that has disposable income, and happily many of them are investing it on technology and gadgets too,” Ng said.

Meanwhile, Junrex Holdings Inc. president Jun Yap said that although the company has posted positive growth in the first few months in 2009, it has to adjust its target, as preference of consumers also shifted from previously buying sophisticated mobile phone units, to cheaper ones.

“We have to be realistic, so we adjusted our growth target for this year,” said Yap who owns the chain of cellphones and accessories shops in Cebu and other neighboring cities and provinces.

Yap said maybe the amount of sales has shrunk, but quantity of buyers is increasing.

The economic meltdown has already been felt by his businesses, saying if in the past, it was easier to generate P1 million sales disposing 1,000 units of cellular phones. Today, his stores have to sell at least 3,000 cellular units to raise P1 million sales.

Most consumers he said don't mind getting low-end phone in order to save, than buying expensive cellular phone units.

In fact, for the first in its existence in the Philippine market, cellular phone maker, Nokia is making conscious efforts to push its entry-level mobile phone models, to cushion the effect of "belt-tightening" measures adopted by Filipino consumers.

This means that the Philippine market will be flooded with more affordable, but fashionable, and features-full mobile phones, that will range from P1,900 to P5,900 per unit.

"We never pushed entry-level phones before, now we are making conscious efforts to push these kinds of models," said Nikka Abes, corporate communications manager for Nokia Philippines. –Ehda Dagooc