A UAE jeweller’s golden moment: when going under leads to a beautiful comeback

One date that will remain etched in Shamlal Ahamed’s memory is March 14, 2002. For the managing director — international operations of Malabar Gold & Diamonds, UAE, it was on this day that the first international retail operation of Malabar Jewellery, of which he was the driving force, came into being with the opening of a showroom at Dubai’s Shaikh Colony Shopping Center in Al Ghusais.

His father, MP Ahamed, a former spice farmer and trader, had sold part of the family property to set up Malabar Jewellery in 1993 in his native Kozhikode, in Kerala, with a staff of eight employees. Shamlal was a young boy of 12 at the time. In an industry where ‘trust’ and ‘quality’ are of paramount value, Ahamed ensured that his customers received gold for the money they were paying and gained full value for it while selling. This business practice soon earned him a larger clientele, and he began to expand his growing business into neighbouring towns.

After Shamlal graduated in computer application in 2002 from St Joseph’s College, Devagiri, Kozhikode, he joined the company. The transition was easy – ‘Trading was in my blood and I was already familiar with the business as I used to accompany my father to the showrooms and workshops and even to buy stock,’ he says.

It was during this time that Shamlal put forward the idea of opening an overseas showroom in Dubai, the proverbial city of gold, as a large number of their customers were from Gulf countries. Thus, to reach out to its core consumers, the company’s fifth outlet and first international showroom was opened in Al Ghusais.

‘The inauguration was held with a lot of fanfare but hardly a few months into the running of the showroom, I realised that my inexperience in running a business was beginning to show up,’ recollects Shamlal. ‘The location we chose was clearly not the right one; I had underestimated the impact location has on walk-in traffic and consumer convenience – vital elements for any retail outlet’s success. I had also erred when hiring people. In my eagerness to fill up positions, I had failed to see whether they had both the right character and skill set for the job. But most importantly, I had made the fundamental mistake of placing the entire stock of gold on an unfixed price basis, assuming that it would yield higher profits in the event of a price drop.’

With all his calculations having gone awry in a slim-margin, high-volume business, Shamlal was forced to close down the showroom within a mere eight months of its existence. ‘I distinctly remember the humiliation, embarrassment and pangs of guilt that followed. I had let down not just my father but the investors who had placed their faith in me solely because I was my father’s son. In the process, I had tarnished my father’s reputation that he had painstakingly built up,’ he says.

‘More than having to face my father, the ignominy of meeting our investors and informing them of the 30 to 40 per cent losses incurred is something that stays with me to this day. I was just 22 years old and it seemed as if my career had ended before it even began.’

Winding up operations in Dubai, Shamlal returned to his hometown in Kerala. ‘My father never berated or criticised my actions. He only said: take this as a learning curve; the lessons you have learnt from this experience will help you grow.’

For the next few years, Shamlal followed his father to work every day. ‘I shadowed him through the day and night. I observed and absorbed his operating principles, his customer-first attitude, his talent for hiring and retaining great employees, building up a great team culture and his tireless work ethic.’

In 2007, therefore, when his father told him it was time to carve out a role for himself within the family business, Shamlal decided he would pick up the reins of the international expansion project once again. By now, Malabar Jewellery had been rebranded as Malabar Gold and the group had extended its reach not only within Kerala but also across other south Indian states.

This time around, when Shamlal made his way to the UAE, he had a different game plan. He scouted for a location in Rolla Square in Sharjah, which had a large Asian population, and decided to go in for a full-scale wholesale operation before relaunching into the retail side of the business. ‘What we did for the first year was to source our specially crafted designs from our centres across India and distribute it to the retailers here. This helped in understanding the pulse of the market and the region, and the following year, in June 2008, we opened our first retail store in the Middle East in Sharjah.’

Working closely with his team, he built up brand loyalty among customers by offering excellent service, the best buy-back rate and a strong exchange policy with lifetime free maintenance. ‘In the jewellery trade, trust is a priceless jewel, and once you have earned it, we have to work hard to maintain it. A clean reputation can only come from being honest and consistent at all times. I think this is what paved the way for our success in the region.’

When Shamlal spearheaded the international operations of Malabar Gold in 2007, it was the 20th outlet of the Group. Fast forward to 2018, and now in its 25th year of operation, the company – rebranded as Malabar Gold & Diamonds – has just opened its 250th outlet and its first on US soil in the city of Chicago. With a $4.51 billion (about Dh16.5 billion) annual turnover in 2016-2017, Malabar Gold & Diamonds today has a retail presence in 10 countries across the world, including all of the GCC, in addition to wholesale units, offices, design centres and factories spread across India, Middle East and Far East.

The company has also expanded into 22 other verticals including real estate and infrastructure development, luxury watch retailing and IT services and business solutions, among others.

Although his initial foray into opening the company’s first overseas branch had turned out to be a costly exercise ‘I have no regrets as it was a great learning curve,’ admits Shamlal. Indeed, the invitation card of the Ghusais outlet’s inaugural event today occupies a prominent place on his office desk. ‘It serves as an inspiration and keeps me grounded. I am grateful for the mistakes I made then and more so, for the faith my father and his partners reposed in me. His first business venture, an ice factory, had failed and perhaps that is why he could be so objective about it. He saw it as the failure of a venture, not my personal failure.’

Today, the company currently ranks among the largest retailers globally in terms of volume of sales and is involved in the entire value chain of the jewellery industry ranging from bullion and manufacturing to wholesaling and retailing. Yet Shamlal shies away from taking credit for the company’s aggressive growth and its plans to further spread its wings in new markets. ‘The success of Malabar Gold & Diamonds is the collective achievement of our dedicated and committed set of team members,’ he says. ‘From our Chairman to our senior and experienced Board directors to our healthy base of 2,700 plus investors and a staff of 13,000. While the seniors decide the vision and strategy, my role is to execute this by taking it forward through our large employee base.’

Employee loyalty has also been key to the company’s growth, he adds. ‘We treat our staff as our extended family; it is part of our working ethos and hence, attrition rates are very low.’ It was the founder MP Ahamed who instilled the culture of placing employees first, even ahead of customers, as he felt a tremendous responsibility to the people who worked for him. ‘This also meant being respectful of their ideas and giving them the freedom to grow within the organisation so that they can be part of the journey of our shared vision for growth. Some of our former sales trainees are now in the top tier management as internal promotions are a key part of our HR policy.’

Just how much the company puts into practice the principle of treating employees as family is evident from the camaraderie Shamlal shares with his colleagues as he sits down for lunch in the office canteen at the company headquarters in Deira, Dubai. Over a meal consisting of Arabic bread, hummus, grilled chicken, green salad and fresh fruits, he enquires about their families and discusses some of the news events unfolding during the course of the day. ‘All our employees, be it in any office or showrooms, are provided simple, home-cooked food every day,’ he says. ‘This is a practice that was started by my father when he opened the first showroom in Kozhikode, a place renowned for its welcoming hospitality.’

For 37-year-old Shamlal, his father continues to be his source of inspiration. ‘He is my mentor and still the most active member in the company. Although he is very hands-on and gets real-time info on all the 250 outlets at his fingertips, he is a family man at heart and urges us to do the same. His mantra is: look after yourself first and take care of your health; and then devote time to your family. The company should only be your third priority.’

Shamlal has taken this advice to heart. ‘Since I have a trusted and reliable team, I am able to take my mind off work when I am with my family. My life revolves around my wife Ashni, and our three daughters Nazah, 13, Ishael, 9, and Simrah, 7, when I am at home. Every year I take three short breaks – with my immediate family, our extended family including my sister, and an annual trip with close friends. We enjoyed the mesmerising and spectacular beauty of Alaskan glaciers last year, while exploring the underground mines in Australia was also an incredible experience. But it is Switzerland that remains my favourite destination because of its picture-perfect scenic terrain.’

When in Dubai, Shamlal gets adventurous every Tuesday night as he samples exotic new flavours or cuisines and creative dishes with a close circle of friends. ‘I am a foodie,’ he says, ‘and love to try out new dishes and cuisines.’

What keeps him excited about the workplace, admits Shamlal, is the thrill of expanding to new territories, capturing new markets, and catering to different tastes and styles that are a far cry from the Indian-inspired designs that form the core of its business. ‘We are investing $960 million in a global expansion plan to triple our retail network from 250 showrooms to 750 outlets in the next five years,’ he says. ‘Our aim is to achieve an annual turnover of more than $6.85 billion by 2023.’

Shamlal is confident the allure of gold and precious stones can never fade. ‘As my father once told me, there’s a 5,000-year-old tradition behind the metal. As long as man and woman exist, love and affection will reign, and people will give gifts. Gold is a perfect gift to both give and receive as it never goes out of style.’

WORKING WITH CELEBRITIES

At a time when jewellery ads were seen as the prerogative of female models, Malabar Gold & Diamonds chose to work with regional south Indian male film celebrities to up their brand awareness in the markets they were present in.

Beginning with Kerala’s reigning superstar Mohanlal in its initial marketing campaign, the brand also subsequently roped in Puneeth Rajkumar in Karnataka, Junior NTR in Andhra Pradesh and Suriya and music composer Ilaiyaraaja in Tamil Nadu.

‘As gold jewellery purchasing is generally seen as a collective family decision, our brand ambassadors were chosen to propagate the brand’s promises and thereby drive our growth in existing and new markets,’ explains Shamlal Ahamed.

‘Once this awareness was created and the brand’s quality and credibility began to inspire confidence among consumers, female celebrities were chosen to showcase the array of the brand’s designs and craftsmanship.’

Jewellery is an aspirational product and celebrities have the aura and charisma to pull consumers towards a brand, 
he adds. ‘

Advertisements with celebrities drive sales and brand recall and creates a deeper connect with the target audience. So, it was to Bollywood that we turned to when we wanted a pan-India face to launch our collections across India and move into the north Indian market,’ he says, explaining how Kareena Kapoor (above) came to be the brand ambassador for Malabar Gold & Diamonds.

As an actress and style icon, Kareena has always set a benchmark through her chic trend quotient, he adds. ‘She is noted for her elegance, style and individuality – all of which perfectly complements our brand.’