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"We Aim To Register the Turnover of 150 Crores By 2018-2019": Nirav Patel

In an exclusive conversation with Nirav Patel, CMD, Abaj Electronics Pvt sheds light on the growth strategy of the brand.

Tags: CDIT, Consumer durable, LG, a SAMSUNG

BY Shipra Srivastava  |  May 07, 2018  |  comments ( 0 )  | 

Nirav Patel

Tell us about the brand Abaj World including the current distribution in the online and offline space (India and International) also the journey so far?

It’s a riveting story of success. Way back in 2012, the foundation of Abaj World was laid. Hailing from the small village of Kadi Taluka of Mehsana District of Gujarat, I graduated as BE (Electronic and communication) in the year 2011. I left the family business to walk my own path. After completing studies, I felt the need to make a name for myself outside of my family owned real estate businesses. Then I decided to give the entrepreneur inside me a go and focused on starting my own business.

Starting your own venture different from a family business is harder than you initially think, but interestingly enough, it gets easier as you set a vision and work on it step by step. I started with share market trading which was not a smooth start. After bearing a loss of 50,000, I decided to switch to stock brokerage company by the name SMC Global, which is listed amongst top 5 franchises globally. This was not enough for me. In 2010, while working for KAYNET I came across a customer who had imported LED TV from Thailand and was struggling with two to three containers for its sales. I helped him out and managed to sell those containers. While I had done this easily I thought that I could get into this venture. Also, I had placed one of the LEDs in my own office and perceived no difference between an LG, a SAMSUNG or this product which that customer was selling under the name of Smart View.

Giving it a serious thought I felt if China could establish itself as a strong player in the electronic goods market in India then why is it that our country is lagging. Why can’t an Indian brand be a game changer? I realized this lag as electronics had no base in India. The ecosystem was completely lacking. Also, there was no local manufacturing; electronic items were often being imported. Then and there I decided to step in. And this is how the seed of ABAJ WORLD was sown.



What is your take on consumer durables market in India? Where do you see this market going over next two years?

Consumer durables market in India reached Rs 1 trillion (US$ 15.45 billion) in 2017. The industry is expected to grow at 13 percent CAGR and reach Rs 3 trillion (US$ 46.54 billion) by 2020. Urban markets account for the major share (65 percent) of total revenues in the consumer durables sector in India. There is a lot of scope for growth from rural markets with consumption expected to grow in these areas as penetration of brands increases. Also, demand for durables like refrigerators as well as consumer electronic goods is likely to witness growing demand in the coming years in the rural markets as the government plans to invest significantly in rural electrification. Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the consumer market. 


According to you what are the major challenges as far as CDIT product retailing is concerned?

Online sales of Consumer electronics have witnessed tremendous growth over the past few years. But the challenges have also increased. Over time, with the growth of audiences buying online and an increase in competition, retailers began to compete more and more to drive traffic through to their stores. This meant promotional channels became highly competitive and, as a result, increasingly expensive, but all too frequently, less and less effective as people began mirroring their high street behaviors, shopping around for the best deals.

However, not only did the number of consumers buying online grow, but they began to become more digitally mature. They started to use the web for more than just procurement and began to do more and more of their research for purchases online too. All this meant conversion rates steadily dropped and, over time, this has created an environment saturated by ‘offers’ optimized to convert but with an audience of which few were actually at the point of being ready to purchase. The challenge for retailers is, if following ‘traditional’ digital marketing, how you create a marketing strategy that appeals to an audience of which few are actually ready to buy.


What are the plans to increase the distribution? How many new stores the company is looking to open? Any plans to open franchise stores?

To fortify our presence, Abaj has set up a network of 75 Distributors and 1400 Dealers. The company further plans to add 150 Distributors and 3000 retailers by 2020. The products will also be available online. The company also plans to sell through institutional sales network and modern sales. At the moment our focus is to be a pan-India brand, so we will be focusing more on expanding our dealer & distributor network. Once flourished, we will definitely be thinking for franchise route.


Who do you see as your potential competition?

The company will be competing on quality and price. If you look at the brands present in the market, the price range is beyond the reach of the middle-class consumers. We at Abaj will be offering quality products at an affordable price range. By positioning itself in a competitive yet affordable price band, Abaj will provide relief to consumers.


Kindly shed light on your product categories? Going forward what are the plans to expand the existing category range?

The home-grown company is expanding its product portfolio. After ruling Indian living rooms with LED TVs, the ‘Ultimate Life’s Things’ brand Abaj is now betting big on consumer electronic market with plans to launch refrigerators, Washing Machines, Sound Bars and Energy Efficient Air Conditioners. The company currently sells over 20 models of LED Televisions.  We are sure that the new offering is all set to create a new benchmark and will be widely accepted by customers and redefine the experience.


At last, kindly highlight your growth plans?

Pan India Expansion: Abaj is currently operating in 8 states Gujarat, Maharashtra, Punjab, Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Rajasthan and Tamil Nadu. Further, the company will be expanding operations in all major metro and non-metro cities including Karnataka, Andhra Pradesh, Maharashtra, Kolkata, Bihar, Jharkhand, Greater Punjab and Delhi NCR. The company intends to be present across India by the end of the year.

Revenue: The Company is growing at 259 percent annually and clocked revenue of over 60 crores last fiscal. It is expecting a turnover of 150 crores by 2018-2019.

Manufacturing in India: The brand which has started its voyage with imports of LED TVs is geared up to set up its own state of the art manufacturing facility at Ghumasan Village, Taluka: Kadi, Dist. Mehsana (North Gujarat) to manufacture LED TVs. The proposed new plant will come up on SH41 State Highway, 50 KMs from Ahmedabad and equipped to produce 6, 00, 000 units pa of LED Televisions. In addition to LED Televisions, Abaj has also debuted in other consumer durable categories including ACs, Washing Machines and Sound System etc.

The company will invest about Rs.54 crores in this plant. The company today boasts of making volumes as high as 7000-8000 units per month. And definitely, this plant will double up the capacity.

The manufacturing facility is likely to be operational by July 2018. The investment in line with the government’s ‘Make in India’ initiative to produce energy efficient and innovative products for the Indian market. The land has been procured and by the end of first quarter of 2018-19 the first phase of the plant will be ready. In addition to building a state-of-the-art facility, we are committed to creating a world-class manufacturing ecosystem in the region, with a base of globally benchmarked vendors and suppliers, which will together generate over 100 new jobs, thereby accelerating the socio-economic progress in the state.

R&D: At present, the R&D of Abaj Group is based in Ahmadabad. Also, we are planning to start the designing of products in China as it has world famous designers. The operations in China will commence in mid-August in 2018.

 

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