As an entreprenuer, his first consignment of mangoes to Tanzania (from the UK) ripened before they could be shipped. Since then however, Arun Nagar's business has been far more fruitful. Shalaka Paradkar speaks to the man who led the mobile boom in East Africa and then came to Dubai to set up Cellucom.
Life in Dar es Salaam has always been anchored around its deepwater harbour. Some 2,000 years ago, Indian traders sailed into Dar (as it's affectionately called) in ships laden with spices, silks and precious stones.
It was here - in the warren of Dar's business district, perfumed with cloves and the bromine tang of the Indian Ocean - where Arun Nagar learned how to be an entrepreneur.
A worthy successor to those traders of yore, Nagar started off importing white goods into Tanzania. When he left his hometown of Udaipur, with its Rajput palaces and pellucid lakes, for the clamour of Dar es Salaam, he had no clear idea of the direction his life would take.
Helped by a supportive spouse and brother, Nagar built one of the greatest mobile phone success stories in the Middle East and Africa.
Nagar's story has been one of grit and perseverance. Coming from a middle-class Gujarati family, his parents wanted him to study engineering.
"I was not very keen on it. I appreciate the fact that I am not capable of studying anything remotely connected to technology," he says with self-effacing humour. "I was more interested in maths and business. That's the direction my life took."
Nagar instead studied economics and entered the workforce. Blessed with an appetite for risk and plenty of gumption, he left India at 22, determined to make a life for himself. All that he knew for sure then was that he would marry Nisha - now his wife and business partner.
His first lucrative deal was struck almost as soon as he landed in Tanzania. "Mbango means 'arrangement' in Swahili; it's the word for making a deal," Nagar says.
"When I landed, I did not have the yellow fever vaccination certificate that the health officer required. I was told I would have to be quarantined for 10 days and it would then be decided, depending on the health officer, whether I would be allowed into the country or sent back to India.
"It was, of course, meant to scare me - and it did. It was the first time I learned to strike a deal. I made a nice one and wriggled out of that situation."
After working in a sales job in Dar es Salaam for several years, he married Nisha in 1988. After this, Nagar kept his day job while the couple tried their hand at trading.
After several failed attempts at exporting - such as trying to ship mangoes to England and pigeon peas to India - they changed tactics and started importing domestic appliances and white goods.
And that was what first brought Nagar to Dubai. He returned to Tanzania with a container full of kitchen appliances that he sold for a handsome profit. Encouraged by the success of the venture, he gave up his day job and became a businessman in 1990.
By the time the mobile telephone boom struck Africa in the mid-1990s, Nagar was prepared. He enjoyed a 'first-mover' advantage in East Africa, quickly winning distributorships for mobile manufacturers.
About seven years ago the Nagars decided to relocate to Dubai as the East African market was proving too small a stage to play out his ambitions.
The suave 45-year-old managing director of Cellucom has few regrets as a first-generation entrepreneur. Sitting in the compact quarters of his Dubai Airport Free Zone office, Nagar beams, "Space is always tight when your business is growing."
To say the company is growing would be an understatement. In a little over seven years, Cellucom has built a retail network comprising more than 50 stores and 60 shop-in-shops across the GCC, with plans to open another 25 outlets in the UAE by the end of 2007.
Recently, Etisalat appointed Cellucom as a key partner for retailing its products and services in the UAE. And the company will soon move into glitzier premises nearby. Nagar's goal remains unwavering though.
"We envisage being a leading supplier of mobility products to consumers in the Middle East and Africa, providing strong value additions and proactive service to the customer," he says.
I
I didn't really know what I wanted to be when I grew up. I would change my career path fairly frequently: wanting to be a pilot one day, an engineer the next, or a businessman - depending on my ever-changing mood.
I went to Africa fairly young, a bit wet behind the ears. I went there from a relatively less bustling town in India, free of prejudices and open to learning.
My impressions of Africa only accrued from actual experiences. The positives far outweighed the negatives. Security was an issue, but not an insurmountable one.
I have always been in business with my immediate family. The three of us - my wife, Nisha, my brother, Ajay, and I - run Cellucom. Ajay and I have never taken a holiday together because someone has to hold the fort while the other is away.
Doing business with family is a comfortable feeling, because not just your careers but your lives are also intertwined. The downside can be that even in situations where you may not fully agree ... you have to compromise on account of personal relationships.
I am the romantic in our relationship. Fortunately for Cellucom, Nisha is a hardnosed, no-nonsense business person. Though we may not have the typical 'lovey dovey' relationship, her acumen has helped our business grow.
I was very excited to be a father when my son, Yash, was born. I was a very enthusiastic and excited father, always taking pictures and filming him on the video camera.
When my daughter, Ria, came along four years later, the novelty began to wane a bit. There are fewer pictures and films of her, but I am trying to make up for that now. Yash is like me - he is calm, composed and enjoys reading. Like most sons in their pre-teens, he sees me as a role model.
I believe I am a fair husband. I respect my wife a lot; it started with love and turned to respect, which is more sustainable. I am very happy when Nisha achieves something - whether in our business, in raising our children or in her own new venture in real estate.
I am a guilty father. I'd like to feel less guilty about not spending enough time with the children. In the evenings, we meet at the dinner table and only get to spend time together every alternate Friday. We (always) take our two holidays a year.
I am a consultative boss who listens more than he likes to talk. I think I need to be tougher. I try to be as objective as possible in my decision making.
ME
Me and my early years:
There was nothing very significant about my childhood. I had a fairly regular Indian middle-class upbringing, growing up in Udaipur, the beautiful city of lakes in the north-western Indian state of Rajasthan.
I was a fun-loving kid - the kind who looked forward to celebrating Holi, with water pistols and coloured powder, rather than Diwali, the festival of lights.
Udaipur is a beautiful city. It is lush, green and dotted with lakes - a very historic town. The school I attended, the Catholic convent of St Paul's, mostly had children whose parents worked outside Udaipur.
As a boy, my hero was my father, who ran a minerals business. I studied economics and operational research at college in Udaipur.
It interested me immensely to try and understand how various companies and large corporations perform. I found the importance of data and research in decision making quite interesting.
I met Nisha when I was 21 and working as a sales manager with a small company. I frequently visited the town of Baroda, where I would catch up with friends from my college days. Nisha was studying then at MS University in Baroda and we met through these friends.
I don't think either of us realised at the time that we were falling in love. But over the course of a year, I found myself increasingly looking forward to visiting Baroda and seeing Nisha. We gradually realised that we had come to care deeply for each other.
Nisha and I married in 1988 (after I moved to Tanzania). That was before I became a businessman. She was very instrumental in helping me become an entrepreneur.
There was a period of transition when I was still working at my day job while trading on the side and she would help me out. She was the first to quit her full-time job to help with the operations. This was how we worked for almost a year until my trip to Dubai.
Me and Tanzania:
I left Udaipur at the age of 22 to go to Tanzania. I wanted to go out and explore the world. I did not have a fixed career path in mind, nor did I have a job in hand when I left India.
Why Tanzania? Because by then I had met Nisha and we knew we wanted to get married and raise a family together. Although she had lived in India for a long time, Nisha's family came from Tanzania. I really liked it too and we decided to settle there.
Of course, I was just 22. All I wanted was to get a respectable job, live a decent life and be happy. So I went to Dar es Salaam, the commercial capital of Tanzania, with the intention of finding these things in a place where I knew no one.
By then, Nisha's family had moved to Shinyanga (a town in northern Tanzania) and she had moved to London to study. (She returned in 1988.) Until 1985, Tanzania had been a socialist economy under President Julius Nyerere.
But in late 1985, President Ali Hassan Mwinyi took over and transformed it into a capitalist economy. From a country of deficits and shortages, it became possible to buy everything - and selling in that environment was easy.
The significant Indian Gujarati diaspora made it very easy for me to adjust. Also because I was quite young, the move was much easier. I learned to speak Swahili and Gujarati.
It was fairly easy to find my feet. In India I had worked as a salesperson, so I was hired as a sales manager almost immediately. I worked for a fairly large organisation in Dar.
It might sound crass now, but I rarely missed anything - so determined was I to look ahead and not look back at what I'd left behind in India.
Missing Udaipur was not on the agenda, as that would have diluted my resolve to stay. It helped that Nisha was there for a short while and it also helped that Tanzania was her country.
I turned (part-time) entrepreneur almost four years after I landed in Tanzania. In that time I learned about the intricacies of business marketing, accounts and sales.
Essentially, once you grasp these three elements you have the fundamentals of being in business. At the time, it was not difficult to start off as a businessman in the country, the entry barriers were very low.
One could buy and sell anything. I came to Dubai with the little savings I had, filled a container with various things and hoped to sell them at a profit in Tanzania.
Within two weeks I had sold everything and it made me think that perhaps trading was a promising business.
Me and turning entrepreneur:
It was a case of third time lucky for me. In 1990, a little while after my first trip to Dubai, I felt confident enough to give up my day job and venture out on my own.
After exporting from Tanzania to other markets, I decided to import goods instead. I decided to get into white goods and home appliances, a much safer line of business with a lot higher demand.
In those days, I would buy any brand of refrigerators, deep freezers and air conditioners. A couple of years later, we tied up with Zanussi of Italy as its sole distributor in Tanzania.
In 1993 I set up a new business in Uganda. I had gone there in 1992 and fallen in love with its lush, green beauty.
The market was also a welcoming one - recent political change had made the economy buoyant. Until then, I had been a trader. In Kampala (its capital) I set up a major retail store, Eagle Appliances.
I called my brother, Ajay, who was in India at the time, to join me there. We continued in the home appliances business until 1997, diversifying into various businesses along the way, (including retailing) food products. We also became authorised distributors for Konica film in Tanzania and Uganda.
Me and the birth of Cellucom:
After becoming a father, I became more organised and ambitious - not just to earn more but also to create wealth. I always wanted to build an organisation that would have a lifeforce and a heart of its own.
Fatherhood added that edge to my ambition; I started enjoying the satisfaction of nurturing something and building a bigger entity for the pure satisfaction of it. Like most entrepreneurs and their businesses, Cellucom is a living being to me.
Cellucom was born in Dubai in April 1999. It emerged from my earlier company Speedolink, which started in Tanzania in 1997 when the mobile phone revolution came to Africa.
Speedolink started as a dealership for the local telecom operator Mobitel. We soon became a distributor for Nokia, first for Tanzania and then for several other countries in East and Central Africa.
By 1999, we realised that we had outstripped the mobile phone market in East Africa. The industry was expanding all over the world, but Tanzania's growth was not keeping pace. We thought we could (capitalise on the) boom better by moving base to Dubai.
It turned out to be a good decision. Dubai is a very welcoming place - there is better security, better availability of human resources and easier access to the GCC markets.
Initially, the purpose of Cellucom was to provide logistical support to our African operations, but after six months, we realised that Dubai was much more than a conduit to the East African markets.
We took a place in the Dubai Airport Free Zone and were in business. My experience in Dubai has been overwhelmingly positive. It took me just three days to set up the company.
The turning point for our business was very clearly (the transition) from being a trading company to a company devoted to value addition. This happened almost four years ago.
The value addition has been primarily through a direct connect with consumers, for which we became a retail-oriented company focused on the consumer rather than trade - right from providing several points of sale to having good customer sales service and after-sales service. We still maintain a strong presence in East Africa as the Nokia distributor.
MYSELF
You speak about customising solutions for the market you operate in. Could you give an example of this approach?
In Uganda, we had a single shop at first and our dealership grew to five shops. But we then realised that we would have to become a franchise operation to expand.
Franchising then was a very difficult proposition in (East) Africa, it had not been tried before. We were the first retail franchise operation in Tanzania - there are still no franchises there, no, not even fast food chains.
We decided to go for franchising not because I had read about it as a viable solution in the West, but because it was not practical to invest in remote locations because we would not be able to monitor or control the business.
This was a concept where we let the franchise owner function as an entrepreneur in his operation while providing the support to our brand. It has been a great success.
Do you have any regrets?
We started with retailing in Uganda, then digressed into trading. I wish I had stuck to retailing from day one. That's what we are now doing in India, where we have just started our operations.
How different is it doing business in East Africa, an emerging market, compared to Dubai, a developed market for mobile phone products?
There is a subtle difference. In the emerging markets one is trying to fill a gap in the supply chain, whereas in a more developed market one needs to not just fill, but also create the demand.
The product or service may already be available, but you have to find a niche for what you are providing. A differentiation needs to be made and provided to the consumer.
In an emerging market, the gap exists and people are not so discerning - even a product of slightly inferior quality may do well, purely because a gap exists in the market.
What's on your personal agenda now?
I now want to study finance, taking an executive MBA course. Particularly for our kind of business, finance is very critical and I want to study the intricacies of fiscal management.
