Dubai: They say money flies in the air in some cities or economic hubs, including Dubai — one has to know how to catch it. This is called opportunity — some call it luck. That's what smart people do.
Dubai, the city of opportunity, has created a large number of millionaires and billionaires. K.P. Basheer, Chairman of Western International Group that owns consumer electronics brand Geepas, retail supermarket chain Nesto, retail brands Clark Ford, YoungLife and Royal Ford, is one of them.
With a humble beginning — selling toys and electronics in Bahrain in the 1980s — he built a business empire that now serves a growing client base in 82 countries. Today his company has an annual turnover of $1.27 billion (Dh4.66 billion), employing 5,000 employees. It is expected to hire 2,500 more people to manage the expansion.
The company grew by a whopping 24 per cent during the recession. At a time when most companies were laying off their staff, they were busy hiring more professionals to head their various departments.
His company is investing more than Dh500 million in expanding the retail supermarket chain Nesto in the Gulf Cooperation Council countries.
In an interview, he tells Gulf News of his journey:
Gulf News: What is your view of the consumer electronics market, consumption in 2012?
K.P. Basheer: We have very positive indications coming our way from initial figures from our target markets, though it is a bit too early to make a complete judgement of what is in store.
Do you think the year 2012 will be better than 2011 — looking at the major economies? Do you think the worst is yet to come, or over?
I personally think that this talk of worse is going to happen is more of fiction than facts. Opportunities of various kinds arise from any calamity, whether it is a social, financial or natural one. It is how one adapts to a challenge that makes the difference. On a macro level, yes, the major economies' decline has had its reflections on every related market, but I personally feel that 2012 would indeed be a year of consolidation for companies who were able to smartly deploy their resources during the tough times and remained focused on the pulse of the market and the customer needs.
How has the year 2011 been for Geepas in terms of business, sales, growth, challenges, etc.
I must say our growth has been consistent ever since our inception and the story was not different even in 2011. We grew by 11 per cent in 2011 which was very moral boosting in a troubled scenario in the GCC countries.
The domestic disturbances in non-GCC countries, of which, some are our feeder markets were the only challenges that we faced in 2011 and that had its impact on our plans. We managed to leverage those issues by focusing on our core competence and our exports which went up, giving us the right impetus to move forward without a pause in our operations.
Our loyal customer base has never let us down thanks to the long association we have with them. From a recent consumer research we carried out amongst our customers, we found that over 73.74 per cent of our customers have bought more than three products from us which reaffirms our position in the market.
Where do you see the growth coming from, apart from the emerging countries?
I believe India and African markets would provide the right platform to any company trying to expand their footprint as well as fortunes. The middle class population who are young and calculating in these markets are large in numbers and their buying power is immense, often surpassing all conventional calculations.
It is also very encouraging to see many big development projects that were slowed down in the Middle East beginning to break ground. I am sure the proactive efforts initiated by our benevolent leaders will have a positive outcome and would bring back the confidence of the market and the yesteryear glory back into the country and the region.
How big is the global consumer market generally? In dollar terms what's the annual value of the sale of consumer that your company produces?
According to last available figures of 2008, the global consumer electronics market was worth $335.2 billion and a new research that has happened in recent times, it is forecasted to grow at a CAGR (Compound Annual Growth Rate) of around 5 per cent during the period of 2009-2012.
We foresee continuous development of digital technologies which are revolutionising the consumer electronics industry worldwide. Moreover, the continuously falling prices of consumer electronics in several regions are also giving a reason to higher number of consumers to spend on consumer electronics. These factors indicate that the consumer electronics industry has bright future ahead, particularly in countries like China and India where the economy is moving at a relatively fast pace. The surge of fortunes in the developing markets is definitely a big boost to the Middle East as well with the inflow of tourists doubling in recent years.
We have hitherto served over 120 million customers in 14 years, of whom a sizeable portion are expatriates who work overseas in the Middle Eastern countries.
In terms of ranking, where do you rank Geepas amongst the most popular electronic brands? What is your market share — the broader categories?
We don't keep track of these things. For us these are mere milestones that keep fluctuating every month and every season. Trends keep changing and so do the buying behaviours of consumers. Those companies who keep the requirements and needs of the consumer would eventually come out with products that suits them and they would indeed penetrate the market until someone else do it with another need-based product.
We have a specific mid segment positioning in the market which is a cost and quality segment which caters to the enmasse audience. We have a range of 1,500 products in every electronics segment viz., consumer electronics, entertainment and home appliances, white goods, personal care gadgets and lighting products. There aren't too many players who have presence in all these segments which gives us the advantage. Moreover we have always looked at our customer first and put his needs above our fortunes and we are grateful for the support we have received from our clientele.
How do you see Geepas' future in the next three-to-five years?
We are looking to expand our product base within the brand, introduce more innovative products that cater to consumer needs and energy saving. We currently have direct operations in 10 countries in the UAE, Qatar, Bahrain, Saudi Arabia, Kuwait, Oman, Thailand, China, Hong Kong, India etc., and intend to spread out to more countries in the next five years.
Do you see consumer behaviour changing in terms of product choices?
The world of consumer electronics is a constantly changing field. As times change, consumer perceptions change and so do their needs and wants. It is always a fight between need based products and want enticed products that create the global electronic sphere.
While a sophisticated gadget could be enticing to a high end consumer for whom it would be symbol of his high social standing, a relatively functional piece would be more appealing to a middle end customer who sees value in it, for his precious investment.
Are you working on a new strategy to boost your sale and business?
Of course we are. We have recently taken a new route to our brand building programme. We are now focusing on creating an emotional connect with our customers. We now have a new brand promise, ‘For you, For life', through which we want to connect a cross section of the market in a personal way.
Looking at the Middle East what is your view of the economies of the region?
I see a very promising future benched on the infrastructure that is being built or expanded within the UAE and GCC environment. The UAE, Qatar, Saudi Arabia, Bahrain and Kuwait are all engrossed in improving their infrastructure in their respective regions and developments worth $180 billion are coming up in these regions. With such developments come in investment and with it comes opportunities.
Which is your biggest market?
GCC and Africa are our biggest markets. We are available in practically every country in these two markets and gaining more ground every year.
How many countries do you export your products?
Eighty-two countries which amounts to almost 40 per cent of the globe.
How many people work for the group and Geepas Company?
The Western International Group employs over 5,000 people in 10 countries out of which Geepas employees would come to around 1,400 people including our China office.
What is your view on the UAE market? How do you see the UAE economy shape up in 2012?
I see the UAE getting into a high drive in 2012. The government has already announced the restart of some of the projects that were slowed down before which is an excellent measure. Come to think of it, we should also salute the vision of the leaders of this great country who despite the market slow down went ahead and completed all promised infrastructure projects including the Metro service. These strategic milestones along with its warm hospitality and open door policy to expatriate businesses are what make the country irresistible to the world outside.
The retail sector has successfully withstood the onslaught of the market slow down and is on a growth path. We are also looking to expand our retail brand Nesto in a big way in the coming years in the region.
Do you have any plans to add more products to your global portfolio?
Yes. We have some exciting plans in store in the retail sector which would be announced soon. We are looking at massive expansions of the Nesto brand in Saudi Arabia, Bahrain and the UAE where we are building 11 large hypermarkets and nine concept stores that cater to a multi brand platform.
What is your group's annual turnover? How is it going to change this year?
Our current group annual turnover is $1.27 billion. We are looking forward to a 20 per cent improvement considering our expansion programmes in the retail sector.
From trader to tycoon
- Born in 1963 as the second son of Mousa, a trader and Kunhami in a small hamlet called Kurikkilad, Vadakara near Kozhikode in the southern Indian state of Kerala, K.P. Basheer was greatly influenced by the business acumen of his father who inculcated in him, a simple lifestyle and righteous business ethics.
- After his formal education, Basheer, like any other youngster from the area those days, reached the shores of Bahrain in 1983, then a thriving economy. After working in Bahrain for a year, he set up a small outlet called Gift Palace which sold a wide range of kids' toys and gifts. The success of the outlet made him expand the product range to electronics, household products, etc. In 1986, the business added wholesale trading through a well-established business network. This network helped the trading outfit to import goods from Dubai to Bahrain to be retailed there. Meantime Gift Palace grew into a larger retail area and the trading activity increased prompting Basheer to go into a high drive.
- He made the decision of his lifetime in 1998 to relocate to Dubai, which had started attracting international attention as an epicentre of business activity in the Middle East. Though the Russian dominance in the market was waning and the market was going through turbulence, the diehard optimist in Basheer decided to hang on to Dubai where he had set foot with great determination. Here is where Geepas was born, first as an idea and then as a reputed brand.
- Nesto, the retail division of the group, has substantial presence in UAE, Bahrain and Saudi Arabia and runs four hypermarkets and 21 supermarkets and department stores. The division is now poised for an 80 per cent growth with 19 new large format stores coming in Saudi Arabia, UAE and Bahrain with a mix of hypermarkets, fashion stores, home appliances etc. Seven new shopping malls are coming up in the Middle East and another eight will be built in Kochi and Kozhikode in India.