(MENAFN - Khaleej Times) Jumbo Electronics looks at its best this year as the company plans expansion in GCC in addition to the UAE and also considers acquisitions outside technology sector in 2013, according to chief executive officer Vishesh Bhatia.
The company, which is one of the leading multi-branded retailers in the UAE, is finalising its two-year growth strategy that also include to open small format stores as most of the products' sizes are shrinking. The leading consumer electronics retailer also expects to continue a double-digit growth this year.
"We work out new retailing strategy and it does envisage smaller format stores... easily accessible to my customers and all the new exciting products will be there," Bhatia told Khaleej Times in an interview.
The industry veteran said nature of retailing is changing and there is no need for big size stores as devices are on downsizing. Giving examples, he said cameras are small, gaming small, tablet, smartphones etc. etc It's expensive if you go for more square feet and multiply by rent, he added.
"More importantly we may be refreshed existing stores to match this new retail strategy that we are now working on. So there might be closing of a few stores, opening many more and refreshing the existing stores," he explained. The company is very close to finalise the strategy and will be announced shortly, he added.
Bhatia rejoined Jumbo Electronics in September 2012 and brings with him over three decades of experience in the electronics distribution and retail markets in the UAE and the wider region.
Jumbo Electronics, which closes its financial year in March, has 24 stores across the UAE and expects total 28 stores by the end of its next financial year in March, 2014. "In UAE, we have very good ambitious plan this year," he said.
He said the company recently appointed general manager to look after overseas operations. Jumbo is planning big expansion in Gulf countries excluding Saudi Arabia.
"We have distribution and retail presence in Oman, Qatar, Kuwait, and Bahrain," he said, adding, "but we have not exploited these enough. Oman has been quite well for us. We can extend that much more as this country has big potential."
Kuwait is another good market and then Qatar, which is preparing for Fifa World Cup. The company will focus on small format for all expansion, he iterated.
Since its inception, Jumbo has been the chief distributor of the iconic brand Sony in the UAE and is a trusted business partner for many of the world's leading brands including HP, Apple, Nokia, Casio, Dyson, Ricoh, Gorenje, Lenovo, Brother, BlackBerry and Acer, to name a few.
Jumbo hopes to get more brands on board for distribution and will announce soon once the deal is done, Bhatia said.
"We are talking to a few people for getting new brands in all segments and some of the discussion are very active," he said.
Jumbo is very actively looking to diversify its portfolio by acquisition this year and most probably outside the technology sector where it's already very strong in the country and other parts of Gulf countries.
"Our business in Jumbo is purely related to technology and I think it would be good for us if we also have some other business in other sectors," Bhatia indicated that clearly shows the company's intention to explore other sectors like other big business houses in the UAE.
"We are looking at a few things for investment and acquisition is one of that," he said. Without disclosing the sector the company is targeting for acquisition, he said it may be [electronics], maybe not.
When asked about acquisition with the country or any other Gulf country, he replied: "It could be within UAE or outside....."
He further said: "We have already started conversations and I would like to see this [acquisition] this year." He hopes something will happen this year.
To support the expansion and acquisition, Bhatia said, the company is very strong financially and also has excellent working capital. On top of that it has good appetite for growth.
The retail sector is among the top performing sectors in the UAE and specially Dubai ride on festivals and increased flow of passengers. Bhatia agreed with all, but said it is a volume driven sector and profit margin of the industry is very low.
The company has achieved very good growth during the first nine months of its financial year ending December 31, 2013 and looks for greater growth ahead, according to Bhatia.
"This year ending March, 2013 seems significant growth of double-digit and next year we predict again better double-digit for another year 2014," he said. Last year was much better year compared to previous year, he added.
He mentioned that distribution business attracts more revenue compared to retail segment. The company represents so many international brands and Sony is top of that. Jumbo is also strong in IT business and SIM card activation is another big revenue generating segment, he added. Enterprise business is another area of significant growth for the company, he said.
Jumbo is also the parent company of the affordable electronics brand, Supra. In Jebel Ali, Jumbo has a long-standing, manufacturing unit with an installed capacity of 60,000 freezers, manufactured on an OEM basis. "Our main export market is Saudi Arabia from Supra facility," he said, adding that the company trying to give more prominence to that facility and expect good orders in future.
Industry trends and DSF
Talking about the trends, he mentioned that smartphones are always in demand and it will continue. Jumbo is one of the authorised reseller of Apple products in the country and 70 per cent of the company's tablet sales come from Apple, he added. Other important volume generating products are cameras, laptop, headphones etc.
Bhatia said: "As a founder sponsor, Jumbo continues to be proudly associated with the Festival, which is the world's most awaited shopping extravaganza. Jumbo has always created excitement during DSF by providing shoppers a rewarding experience by offering great products at great value. Along with increased investments in product offers, we will also run promotions including raffle draws, discounts and bundle offers" he added.
The company launched its Dubai Shopping Festival (DSF) campaign by saying "Jumbo at its best" this year. Talking about first 10 days trend during the DSF, he said: "Weekend sales are 50 per cent higher than the regular sales. Smart phones and tablets are sought after products and sales are highly inclined towards hypermarkets, because of better offers."