Vikas, you have quite an impressive profile: you went from real estate, F&B, banking and then retail. Kindly share with us one of the most valuable things that you learned from such an interesting journey:
For me, the core life lesson I have learned is that if one focuses on the needs of your customer and if you treat the customer as your principal shareholder, you will succeed irrespective of the product category or the industry you are in. The customer is the key and staying relevant to him/her is the only sustainable model. When I say ‘principal shareholder’, I mean if one understands the simplicity of the fact that the customer is paying your wage, your alignment will be in making sure that the customer is satisfied and he/she will buy ‘again’. That ‘again’ is the other trick. Getting the customer once is easy, it’s the repeat customers that make your business sustainable.
You also made the transition of managing business operations from India to the UAE, how are the business landscapes in these two markets different?
India has a population of 1.3 billion, and even though there is tremendous competition at all levels in all industries, there is a huge middle-class consumption that fuels retail there. So if a business figures out its most beneficial positioning, what it stands for, and who its customers are, there is a higher chance its business model will work. However, the UAE’s population is less than 10 million and so businesses need to be innovative in both product and marketing.
Lately, the market has also become very ‘discount’ driven, so one’s sourcing and margins become a big key to profitability. The costs of running retail in the UAE are also becoming prohibitive for growth. The customer is also moving to ‘globally’ consuming as per an omnichannel buying pattern, so one needs to keep that in mind. The buyers here in the UAE are very discerning and quality conscious. It really boils down to market size and spends thereof.
Let’s talk about your new venture: you recently established your own retail consulting firm Akshar Capital where you invest in and guide retail startups in the MENA and India markets. What are you hoping to achieve from this new venture and what qualities are you looking for from startups that you will potentially invest in?
Having been associated with Fortune 500 companies, entering new markets and setting up companies in the Middle East, North Africa, India and the Sub-Continent, I am in a great position to guide and help startups in Retail and QSR (quick-service restaurant) to navigate the potential challenges, consumer behavior (market-specific), as well as the geopolitical dynamics.
I do deeply believe that if the product and price have relevance to a consumer, one will inevitably succeed. Today, I also work with smaller retail companies to help them to expand into new geographies, and obviously help them raise capital for their respective growth. I am looking to support passionate entrepreneurs who are out creating their own legacy.
How do you keep up with changing customer behaviour? And what does it take to win the hearts of consumers in different markets that you’ve worked in?
You need to have your eyes on the ball all the time. The customer is not only changing in his/her spending patterns, but more importantly, the average customer is getting younger. In your team, you must have ethnic diversity as well as more women at all seniority levels, understanding that 80% buying decisions are influenced by women today. You must also have younger people in your management team who are more aligned with changing trends and can advise you how to adapt quickly.
You must also be in the habit of visiting the competition and other players of the markets regularly, both alone and with your teams. There is no better market research than done by yourself. Encourage non-retailers in your network to visit the stores too. One never knows where the next big idea will come from.
The UAE is one of the regions that have the highest purchasing power now, what’s the customer behaviour like in the region? And how does it compare to the India and Africa markets?
The average UAE customer are very discerning and very discount-driven today. The customer here is also driven by a very high standard of service, however they do not have as much choice as the customer in India. Africa is the next biggest opportunity for global brands. There are big markets like Nigeria with over 200 million population and Egypt at nearly 100 million, South Africa at 58 Million and Kenya at 45 million. People have money over there too, but the products don’t get there due to poor infrastructure, which the Africa Finance Corporation and the World Bank is working on today. Once these are developed, Africa will be the biggest consuming retail market globally.
Tell us some of the challenges managing retail business in the MENA (Middle East North Africa) and India markets:
While there is a huge consuming population, the biggest challenge in India continues to be very poor infrastructure, red tape and bureaucracy. In the MENA, the concern is poor consumption trends given the import cost and VAT, making the products expense. Hence, price markdowns are making retailers drop profits year on year. The rents in malls continue to be very high and prohibitive, especially for new retail entrants.
What do you think of the KaaS (Knowledge-as-a-Service) economy?
I think this is a great concept and we should embrace it. Data is the new oil and lets us use knowledge to drive our business forward. However, we must be willing to pay for the KaaS service to continue demanding quality and credible knowledge.