eXtra boosts market share in Q1 2020, COVID-19 affects consumer behavior: CEO

United Electronics Co. (eXtra) raised its market share to 17.8% in Q1 2020, from 16.9% in year-earlier period, CEO Mohamed Galal told Argaam in an exclusive interview on Sunday.

The company has effectively dealt with the disruptions caused by the coronavirus pandemic and lockdowns to ensure sustainable operations and inventory.

Accordingly, eXtra’s sales rose to SAR 1.2 billion in the first quarter, driven by showroom and e-commerce sales, as well as consumer finance services through Tas’heel.

The home appliance retailer realized a change in consumption patterns, as consumers are shifting to online shopping, especially amid the precautionary measures imposed by the Kingdom since mid-March.

Galal added that e-commerce sales surged almost seven-fold during that period, when compared to last year.

The e-commerce sales accounted for 20% of eXtra’s total sales in Q1 2010, compared to 10% a year earlier.

Meanwhile, Galal apologized for delivery delays, explaining that the company operates under unfavorable conditions amid the COVID-19 lockdowns across the Kingdom.

All departments in the company were directed to solve these issues, which are likely to be handled in the next few days, as soon as possible. The company will develop its operations going forward to avoid such problems.

Moreover, Galal expected a temporary impact of raising VAT and suspending the cost-of-living allowance on the electronics and home appliances market, which might lead small companies to exit the market, due to recession and higher operating costs.

Accordingly, the market will increasingly shift to organized retailing, he noted, adding that this impact will last until consumers become able to absorb these changes.

“Challenges create a lot of opportunities. We’ll save no effort to seize available opportunities, such as the market shift to organized retailing, to raise our market share and enhance our position as a top local player in the e-commerce sector,” Galal stated.

“We also aim to enhance the Sharia-compliant consumer finance services to boost growth going forward. These efforts will help us come out of the crisis stronger and more resilient,” he concluded.

eXtra reported a net profit after Zakat and tax of SAR 34.7 million for the first quarter of 2020, compared to SAR 33.8 million in the same period last year, Argaam reported.