BRIC POS Strength Tied To Oil

Written by Evan Schuman
March 26th, 2008

POS purchases in Europe/Middle East/Africa are growing at a faster than expected 4 percent a year, much of it because of Russian oil revenues allowing the country to build out its retail infrastructure, according to a new POS report from the IHL Group.

Overall, emerging BRIC countries (Brazil, Russia, India, China) show the most potential for growth in POS for 2008 and beyond due to market size and emerging retail infrastructures. On its own, Russian POS shipments increased about 12 percent last year and they should see similar growth or higher in 2008, the report said.

"The largest boost in 2008 will come from replacement of systems installed in the late 1990s, just before the Euro conversion and Y2K moves and it will mostly impact the Large Format Food & Drug and Hypermarkets," said IHL President Greg Buzek.

Buzek said that he had expected smaller increases because of how mature a market much of Europe is. "The falling dollar helps, too," he said.

The move to POS, though, shouldn’t be interpreted as an embrace of cutting edge technology. "You’ve got countries that are adopting Western technology and Western ways. But this is a base Point of Sale, it’s really base blocking and tackling," Buzek said. "It’s not necessarily customer identification or consumer marketing. This is heavy discount shopping."

Shipments to developing markets in Eastern Europe and the Middle East nearly equaled those going to Germany, historically the largest recipient of shipments in the region, IHL said.

On the software side, the report saw huge increases in Windows Embedded for POS (WEPOS) activity, with shipping growing by 254 percent, compared with a 55 percent growth for Windows XP Embedded and a comparatively anemic 9 percent growth for Linux-based EPOS shipments.

"Microsoft has been heavily focused on WEPOS and is focused on that globally," Buzek said. "IBM is a big proponent of Linux, but outside of IBM, there’s no other vendor out there pushing Linux. It’s typically a customer request option."


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