Dubai: If you thought all businesses in the UAE were only thinking doom-and-gloom during the pandemic months, you sure haven’t met Arvind Agrawal.
“No, we did not hit the panic button,” said the CEO of Jumbo Group, one of the UAE’s legacy electronics retailer and wholesaler. “Unlike many other businesses that cut salaries, dramatically dropped people, shut down locations, we did not do any of that. What we did was take a measured approach.
“We looked to the East, at China, to come to a reasonable conclusion on how the local and regional markets would react once the full weight of COVID-19 became apparent. Because the East was ahead of the curve with their lockdown and control measures, as well as how consumers reacted.
“I have to say we forecast quite correctly. We continue to monitor these forecasts - and we certainly didn’t drop our buying.”
Change turns favourable
That did help… as the market and its consumers switched to work-from-home requirements. Electronics and tech retailers were among the first beneficiaries as demand spiked for smartphones, laptops and tablets, and networking equipment.
It didn’t stop there…
“There was Increased buying in many categories, and we recognised how the trend, was shaping up,” said Agrawal. “The lockdown phase created its own demand curve for small domestic appliances. It was as if everyone wanted to upgrade their home and kitchen appliances… and not just their tech needs. With no one going out, it made sense to pick up air fryers, coffee machines…. and even light vacuum cleaners.
“We were never into home appliances in a big way – and so, we were picking up new distribution contracts with niche brands and bringing them to this market at the first opportunity.
“Musical instruments - moms were happy to buy these to keep the kids engaged. It was another category that really took off.”
Been through it all
The Jumbo Group is no stranger to market cycles – and in knowing how to emerge out of the downtimes. It was launched by Manu Chhabria, one of the sharpest minds in the UAE’s corporate world and who created quite a stir with some daring takeover moves that shook up India’s business world in the mid-1980s. (There are those who insist that a month watching Chhabria at work is worth a year’s class in business administration.)
It’s been three years since Agrawal joined the company, which is still very much a family-driven enterprise after Chhabria’s death in April 2002.
“We started on the group-wide digital transformation in the middle of 2019 – after COVID-19, we expedited that,” the CEO said. “We completely transformed our services business, meant for enterprise clients and consumers both.
“So, when the market opened, we were really organised to take advantage of pent up demand.”
Scaling the charts
There was quite a lot of that, much in the same way that Chinese shoppers responded after the first easing of controls on movements and commercial activity. Through the second-half of last year, major promotions launched by UAE retailers – offline and online – did click, according to market feedback. Again, the gains were led by tech brands and appliances meant for home.
- 1974 - Jumbo became one of the first tech companies to start its retail and distribution business.
- 1975 - Launches Sony in the UAE through an exclusive partnership.
- 1980 - Iconic Jumbo House building is launched in Bur Dubai as group headquarters, which included the first large-format retail store.
- 2001 - Sets up an Enterprise Systems business to deliver ICT solutions and services to the corporate sector.
- 2005 - Opens the largest electronics store in UAE at Mall of the Emirates, covering 27,000 square feet.
- 2017 - Opens a franchise store at Dubai Mall for the fabled premium appliances brand Dyson.
- 2019 - Signs MoU with Dubai SME to strengthen 3DmManufacturing operations.
Adding to portfolio
This is where Jumbo’s plan to acquire new global brands – many of them niche and in the premium space – hit the sweet spots.
“With distribution deals, we can add brands, we can add geographies,” said Agrawal. “The competition had cashflow issues. High-end brands that were with weak local groups were happy to come to us. This helped strengthen our portfolio significantly last year.
“We spent strategizing during the lockdown period and five or six scenarios were painted out. But all through this time, we focussed on financial performance. We are a cash-rich company.
“In retail, we were gaining market share. Our profitability from retail operations is significantly up – and it’s been up over the last three years.
“Once the market opened up, we were the only tech retailer to announce curb-side pickup in April-May itself. We had express delivery within four hours.”
Jumbo has had an online presence for years… and it’s a point that Agrawal makes with quite some emphasis.
“It’s absolutely wrong to think we got into online recently,” he says, with just a touch of exasperation. “Jumbo was the first to go online in the market – yes, that’s right. We launched online in 2001, and it was catering to the wholesale business. That’s way before anyone else, and well before Amazon got here.
“Then, in 2015, Jumbo made a huge investment on online operations. I joined in 2017, and at that time, we significantly started investing. Even before the pandemic, we were doubling our online business year-on-year.
“Some of the other retailers are copying us, even down to any spelling mistakes we have on our online site. Ecommerce was nearly 12 per cent of the business before the pandemic, which is healthy. Since COVID-19, it has become 16 per cent. That’s still significant.”
But will strategies that clicked in 2020 still have a shelf-life once COVID-19 uncertainties ebb?
“Sure, we are not taking anything for granted. – but I don’t think it will ever go back to where it was in full,” said Agrawal. “Habits picked up from the work-from-home phase will continue.
“As for Jumbo, everything is running in double-digits …”