Ashish Panjabi, chief operating officer, Jacky's Group, has been running the retail interests of the group since 2004. Under Panjabi's leadership, Jacky's won the Superbands award for the last three years, the Dubai Service Excellence Award in the Electronics category and the Top Entertainment Retailer from Deira City Centre.
Another notable achievement has been the entry into IT retailing as this constituted just 5% of the company's retail turnover in 2002 but today contributes 55% of sales. This has seen Jacky's emerge as the top retailer in terms of revenues at GITEX Shoppers for the last four years.
In an interview with Zawya, Panjabi talks about the relevance of using social media in today's business scenario and how Jacky's managed the recession.
Jacky's uses social media in a major way to connect with potential customers. Do you think that is the way forward for all companies in the region?
It's inevitable. I see it as part of customer conversation in today's world. Earlier, the customer visited the store, called you or got in touch with you via email. Now, they are using social media to communicate with us. Social media is a great way to keep the conversation channels open with our customers. Plus, it can be used for marketing, as a pre-sales avenue and as an educational platform to raise awareness on certain issues that we want to talk about. For instance we talk about our eco-exchange program, which is about product recycling and competitions, through social media.
It is also being used as an after-sales tool both by the consumers and by us. We get queries about where customers can get something fixed, or find a certain product or even to complain. The more we listen to our customers the more we can contribute as well.
Social media gives a face to the company and adds a little bit more personality to the company that up until now would have just been a name and a logo for the consumer.
However, companies must realise that social media is all about transparency. You can't bluff your way around as you will be exposed. It's about being as honest as you can be. If you have messed up you have to own up to it and say "thanks for the feedback, we will take it up." That way we don't lose a customer and at least we know what we have to do going forward.
Do you think that social media helps build loyalty?
There is no customer loyalty today as customers get the same product anywhere and everywhere. However, where social media makes a difference is that once you start a conversation with a customer you can maintain that. People remember a good conversation, good service and the fact that you helped sort out some issue they had. So it drives traffic and differentiates you from others.
In today's fast-paced world, where technology becomes obsolete soon after a new product hits the market, how difficult is it to do business?
Actually it helps business as people now upgrade more often, buy new products more often, unlike earlier when they would stick with one product for ages till it broke. People these days are more tech-savvy and actually wait for new products to come into the market so that they can lap it up. The mindset is different in today's world as there are so many exciting products and apps out there for people to use.
Also, it never happens that a new product comes in and the retailer is left holding the old stocks because one, they move very fast in this part of the world and two, it all comes down to multi-tier planning between the brand, the distributor and the retailer. The planning levels in this region are very sophisticated as they take in all aspects like trends, forecasting and forward planning.
Then events like DSF, DSS, GITEX etc. also help the business and product launches are planned around those times as well in order to capitalize on that.
So it's not that much more difficult to do business these days as it all boils down to planning and awareness.
What was the effect of the recession on your business?
Our retail business actually registered a 13% growth rate in pure retail sales from 2009 to 2011. This is in spite of the fact that we discontinued some retail outlets during the course of 2010 and 2011. If we do an apples-to-apples comparison of same-outlet sales, the growth would show a higher figure, I'm sure.
How did you keep the bottom line looking good during this recession?
Everyone was under pressure and we have also not been immune to it. A major factor that was especially prevalent in this region was the fact that there was a lot of retail real estate that came up in this country in a very short period.
Between 2005 and 2009, Dubai witnessed the opening of the Mall of the Emirates, Ibn Batuta mall, Dubai Mall, Outlet Mall, Mirdif City Centre. So when the recession hit, some areas suffered more than others. For instance, malls like Wafi and Burjuman, which were premier malls at one point of time, slowed down during the recession.
So we had to take another look and rationalise our business and decide where we had to be at a time like this. We moved out of locations that did not work for us, like Century Mall, Souq Al Bahar, Sahara Centre. This decision helped us as we did not see the volume suffer and we were not carrying the extra weight of overheads in locations that were not working out. We also did cost control wherever needed and continued investing in areas that needed more investment, like customer services.
During the recession, we also went for ISO certification as it helped us get everything documented again and relook at all the processes in the company and improve things wherever needed. We did some headcount reduction, reallocation and adjustment.
It was also a good opportunity for us to come out of certain businesses that we wanted to come out of, like office automation.
What level of growth are you targeting this year?
The days of 30%, 40% growth are gone. We have to be realistic about what is a sustainable long-term growth for us so we are looking at 5% to 10% growth as our industry is going through a phase where product prices are also crashing.
We have seen LCD TV prices crash by 25% to 30% in the last one year. We have seen the average selling prices of laptops go down by about 20% to 25%.
So, in order to earn the same revenue that we earned, say, a year ago, we have to sell more units and then sell a few more to take things further.
If we are talking top line revenue of 5% to 10% from the unit sale point of view, we are talking about selling 15% to 20% at least, just to get the same growth. So from a long-term perspective, I feel that a 5% to 10% growth target is a healthier figure.
What new initiatives will support this growth target?
We will focus on what we can do out of the existing stores in terms of improving performance and looking at the services we can offer in the stores. We are offering extended warranty that we sell and that has worked very well for us. We are also looking at the recycling eco-exchange scheme that works well for us as it is an avenue for bringing the customer to the store to recycle a product and then getting store credit.
Geographically, we are where we want to be in Dubai - Deira City Centre, Mirdif City Centre, Dubai Mall, Mall of the Emirates and Al Nasr Square. We are scouting for a good location in Abu Dhabi. Once we get the right place we will move in quickly. Outside the UAE our focus is on East Africa. We are looking at growing our business in places where we have a presence, like Kenya, Tanzania and Uganda. It has a fast-growing population which is increasingly getting wealthier.
We have more brands over there, more categories in that market. We are doing retail, distribution and after sales service there. We are doing different product lines like electronics, FMCG, tyres etc. So there is a lot of opportunity there for growth.
Your vision for Jacky's?
Do whatever we can to the best of our ability as we are not in the race to be number one or anything. The focus is also to run our business in an efficient manner.
What changes in regulation would you like countries in which you do business to implement to support your sector?
Fortunately, doing business in most parts of the world where we have a presence - like Hong Kong, Singapore, UAE - is fairly straightforward. Africa has its challenges like corruption, currency volatility, higher duties etc., but these are things that one faces all over the world. Plus, it's an emerging economy but things are developing there now and improving. So as long as we do business through the proper channels we are fine.
Where do you see the Jacky's Group five years from now?
We don't plan that far ahead because I don't think that you can predict accurately where things will be five years down the line. We have seen quite a lot of change in the world in the last decade - like the 9/11 bombing and the recession. So in today's volatile and fast-changing world it's not realistic to work with a five-year plan. You have to be agile, in terms of business. The companies that have been successful and survived in the last decade have been those that have been able to re-strategise and adapt quickly to the ever-changing business environment. We don't plan beyond one or two years.
What is your view of the possible effect on your sector and your business from the tensions brewing in the region and with Iran?
Dubai has always benefited from any crisis in the region. Each crisis brings more tourism, investments in real estate and business for the emirate. It helps our business as well, because as second homes get built here, people buy from us, plus we also get to send stuff from here to countries in the region. For instance, right now we have shipped goods to Libya where a lot of reconstruction is happening. The crisis in Iran has not affected us directly as we don't do any business with Iran directly.
Your mantra for success?
Keep it simple and don't over-complicate processes. At the end of the day the simpler you keep it the easier it is to do your business.
Learning to pick a crack team and then delegating responsibilities is also part of the success story.
© Zawya 2012
