Considering e-commerce’s strong presence in India, Tablez totally believes in the brick-and-mortar model of expansion. This model is here to stay, and the story of Indian retail will continue to be written around it in the coming 10 to 20 years…
Adeeb Ahamed, Managing Director, Tablez was recently honoured with the Entrepreneur of the Year award at the Franchise Awards 2017 in New Delhi. Ahamed, a multifaceted professional, heads Tablez, the organised retail arm of Lulu Group International, along with LuLu Exchange, the financial services company which has developed more than 170 branches across the globe in a merely eight years. He also heads Twenty14 Holdings, the hospitality arm of Lulu Group, which owns prestigious properties around the world including the Great Scotland Yard in London, the Steigenberger Hotel Business Bay in Dubai and Sheraton Oman in Muscat, among others.
With Lulu Group recently announcing big investments in India, Ahamed has been very busy. He has been chosen to oversee the rapid expansion of leading global brands into GCC and the Indian subcontinent. Some of the brands Ahamed is bringing into India are Cold Stone Creamery (a leading US-based ice cream chain), Galito’s (a South Africa based flame grilled chicken chain), twin brands from Grupo Cortefiel – Springfield and Women’secret. All these brands are expected to hit the top metros in India soon.
Apart from this, he helped launch ToysRUs and BabiesRUs, leading global toy stores, in Bengaluru in October 2017.
In an exclusive interview with IMAGES Group’s Sandeep Kumar, Ahamed spoke of his retail brand’s business model, as well as expansion plans in India.
Founded in the year 2010, Tablez is an F&B brand retailing company, which currently runs around 35-odd restaurants under different brands all over the world. We have a collective brand size of nearly six to seven brands in our entire portfolio in UAE. In 2013-14, we entered India with our F&B brand, Bloomsbury’s along with the launch of our mall in Kochi. At that time, we figured India was at a stage where there was an opportunity to create visibility of international brands in large numbers. We also understood that Indians aspired towards acquiring Western brands. Keeping this in mind, along with F&B, we started building a strong portfolio in other retail sectors as well.
We then brought Galito’s to India, a South African peri-peri chicken specialty F&B brand. After that we took Cold Stone Creamery to India, an ice cream brand from USA and then came Springfield, a Spanish apparel brand which is located in over 1,000 markets in 60 countries. The fifth brand that we were associated with was Women’secret, a women’s essential brand with a large presence in the international market. The sixth and seventh brand which we introduced here was in the toys segment, ToysRUs and BabiesRUs. All of these brands have one store operational with many more stores opening up in India soon.
LuLu exchange site is the financial retailing arm for the group side as such. Started in 2009, in Abu Dhabi, currently, we are spread over nine odd countries and have a collective store count of close to around 170 plus stores. Then there is Twenty14, our asset management arm, which essentially maintains our hospitality portfolio.
We are also currently we are building two of the Marriot properties in Bangalore and one in Kochi. Predominately we don’t manage these units, these are all managed by third-party international players.
Currently we have six operational stores of Cold Stone Creamery, two each of Bloomsbury’s and Galito’s followed by one store each of ToyRUs, BabyRUs, SpringField and Women’secret. By end of this year, we are hoping to add at least 10 to 15 more outlets collectively across the country. We have in the pipeline, signed leases from various players starting from Delhi in the North and petering down the South of India.
Early Setbacks & Challenges Faced in India
I think the customer demand or the DNA of the customer as such remains the same across the globe. There is always a liking towards a particular brand, and it continues over a long time if the brand quality and service remains intact.
We at LuLu are a customer-focused organization, where we always give the first preference to the viewpoint of the customer. We figure out what they want and modify the product according to the demand. Internationally, the customer base and demands remain same to a larger extent but in India, the business was a tad bit difficult to establish in the initial stages.
Nonetheless, things are getting on track in India. A big chunk of the credit for this goes to the present government, which has lived up to its promise of ‘ease of doing business’. Unfortunately, for now GST has not been very successfully implemented, but in the long run, it will certainly benefit the retail community at large.
I think we have arrived at an appropriate moment in India. We know it would not be smooth, and expected a lot of confusion initially, but were confident that as days passed, we will settle in, and that’s exactly what is happening. Once we are fully settled in, I am confident we will see a much faster rate of expansion of our retail arm across India.
Difference in Approach of Tier I & Tier II Cities
The Consumer Approach: We chose Kochi because the dynamics of the entire group is based out of Kochi and that made it easy for us to enter through that route. Kochi despite being a Tier II city is a net consumer state. The consumption level is quite high there. In terms of sales, we see that it is pretty much the same as any other metro in India. We have not touched Mumbai and Delhi so far, so I can’t quote those numbers but in comparison to Bangalore, Kochi has been pretty much the same.
The Company Approach: Since our entire business plan was made in the pre-GST era, we didn’t jump into building a central warehouse in every state. We moved rather slow and believed in a natural progression from down South to the North of India. Currently, with the flexibility of not wanting to have a warehouse in each state, our expansion plans have become much easier to implement.
Five Years from Now
Although e-commerce has a strong presence in India, we at Tablez totally believe in the brick-and-mortar model of expansion. The traditional model of retail is here to stay, and I think the story of Indian retail will continue to be written around brick-and-mortar in the coming 10 to 20 years. I am very confident and bullish on this factor for many reasons, one of them being that every relevant piece of data shows that e-commerce is a medium of penetration only in Tier II and Tier III cities where actual shopping malls are not present or in markets that bigger brands can’t penetrate. Once we develop a strong base of shopping malls across India, then I think more and more brands would like to be physically present in these towns rather than digitally present. So, in five years, we see us opening more stores.
Investment & Infrastructure
Around 80 percent of the money that we need to build malls and open more stores in India has already been pumped into the market and in next couple of months, we would pretty much put in the entire amount of Rs 300 crore in the Indian market, which we had committed in 2014-15. A second round of the funding will be on the cards starting 2018.
Coming of international brands into India is not a bad thing. Local brands can study them and figure out what’s working for them in terms of new trends, sales and marketing styles. It will help organise the Indian market greatly.
If we look at the F&B scenario, the majority of the brands originates from USA and the reason behind this origination is that they follow certain policies and procedures. The entire production cycle is so well planned that it scales up the brand easily. In India, the brand is more human-oriented and scaling up becomes a very difficult scenario. Indian cuisines are chef-based rather than a factory procedure on most of the occasions. But brands like McDonalds and StarBucks, don’t need a qualified chef to make their products. A human and machine combination fulfills all needs. We need to start thinking about creating a fine mechanism of easy maneuverability and making procedures or we will find it hard to expand our brands across India.
The Indian Toys Market
Hamleys has 60 outlets across India and we have one. It’s a huge difference. The entire toy market business is 90 percent unorganised in India. Combining Hamleys and other multiple toys store throughout the country would not even constitute 10 percent of the toy segment in the country. So, I think there is a large space for any organised toy retailer to come and create a much more favorable industry here. I don’t see Hamleys as a competition, I see them as a definite partner in making a better-organized toy sector in India. In fact, we need more players like Hamleys in a country like India.
Projection for the Current Financial Year & Revenue Targets
I think it is very early to comment on this because most of our brands are new. Our F&B segment, which was launched just a couple of years ago, has seen a double-digit growth. We are very happy with those numbers. We strongly believe that 2018 should see us as as Rs 100 crore+ company.