Muscat, August 19 – The recent decision to allow multiple agencies to import the same product will take some time to show results, especially with the dealership of automobiles and its spare parts, according to industry experts.
Priyantha Senarathne, general manager and top consultant at Top Gear who has spent a number of years with a luxury auto brand dealer in Oman, told the Observer that even if a new player manages a dealership agreement, for example for an auto brand, the shipping and product costs will remain the same as it is for the existing competitor.
“The only way he can reduce the price is by cutting his profit margins, which means he needs a strong financial muscle to stay competitive.”
He said huge investment is needed for auto dealerships as they have to meet the specific standards set by the company.
“The dealerships for auto spare parts may need less investment, but here too generally automobile manufacturers do not allow separate franchisees for parts and accessories,” he said. He said it is too early to comment on the impact of this decision, but it will certainly help with certain products such as home appliances or electronic gadgets, where consumers get an option in terms of who offers better after-sales service.
Dhanraj Singh, who had worked in Oman with the consumer division of a leading brand and is still
based in the region, says, “Competition will naturally bring down prices like we have seen in many sectors, and improve after-sales service for gadgets and home appliances. But the market should also grow accordingly to encourage new players.”
Many experts felt it is all about being able to clinch an agreement with the manufacturing company, for which the new dealer needs to convince it will not harm its reputation.
“The government may offer opportunities for new players to enter the market, but it will depend on their financial muscle and business acumen to survive competition,” said a senior executive of a popular electronic brand in Oman.
“It is a welcome decision but will depend on how young entrepreneurs will be able take advantage of the policy,” he said.
Consumers, however, are delighted it will make service and prices more competitive, especially mobile phones and automobiles.
Now, all laws and decisions in Oman permit the import of different products and goods from all over the world without any restrictions.
Merchants can get necessary authorisation for imports through the Bayan, which is under the Directorate-General for Customs, as it will save the investors’ time and effort.
The final amendments on the act of commercial agencies have enabled SMEs to expand business by diversifying goods and products offered to consumers.
Moreover, the Ministry of Commerce has invited SMEs to exploit these opportunities through which they can expand the activities of their companies to become competitive in the market.