Mr. Nirav Patel- A great entrepreneur, a mature businessman from the very age of an engineering student, Nirav Patel is the Chairman and Managing Director of ‘Abaj World’, one of the best and growing electronics companies in India. Nirav started ‘Abaj World’ in 2012 when he was just 25. He has a vision of utilizing the human resources of the nation itself. The same formula is applied by the technologically advanced nations. In the world of online marketing and sales, where every offline marketer fears from the losses due to online marketing, he still believes in the offline networks, chains of dealers and distributors and runs his business in a very appreciable way. With a zeal to prove himself, and do something different, he did vast market and business research to take the company to the apex level.
About Abaj World
With ‘Best Quality at Best Price’ as its sole aim, ‘Abaj World’ is a leading electronics brand in Gujrat and major part of Indian sub-continent. Started in 2012, Abaj now is extended to two sub-units ‘Abaj Electronics Pvt. Ltd.’ functions with sourcing and marketing and ‘Abaj Technologies Pvt. Ltd.’ as manufacturing unit.
Abaj provides the consumers with best of LED T.V.s, LCDs, washing machines and sound bars with plans and designs for fully automatic washing machine, refrigerators, and air conditioners under consideration. So, with best of team and techno experts, Abaj World flourishes with the support of happy customers.
Last year about 40,000 units were sold and the revenue generated was 60 Crores, and they are working towards 150 Crores target. There are 1500 retailers and 75 distributors associated with the brand.
One of our crew members got a precious chance to interview the leader of the leading Brand. This is how, it goes, providing a view to its long journey to great heights.
Que- Why didn’t you choose your family business and started a new concept? What motivated you?
Nirav- When I was in my college I had the motivation to work in terms of value creation by solving many of the technical issues which our nation and our people are facing. I always felt the lack of technological ecosystems in Gujarat as well as in India. The motivation to start what I have today, came from one argument in my mind- “Why can’t we, ourselves start and develop our ecosystem?” We have got significant exposure from the concept of “Make in India” given by our honorable Prime Minister,” Narendra Modi”. I also had a zeal to create my own identity which I feel I couldn’t have got in my family business. The family support was always there for me, but I had chosen a life free from dependency. I had to try business on my own.
Que- Why did you choose the word ‘Abaj’ as your brand name?
Nirav- In Gujarati ‘Abaj’ means a hundred crores i.e. a billion. So, the commercial origin of the word ‘Abaj’ comes from that. It carries a religious meaning too. I am a great believer in Lord Swami Narayana (Akshardham Temple). One of his great followers was saint ‘Abaji Baba,’ and the name for the Brand comes as a blessing as the beginning word of the saint’s name. So the word has Gujarati commercial as well as religious origin.
Que- How did you start your company ‘Abaj’?
Nirav- We had registered the company in 2010 when I was in college. At that time, I was also doing some work related to stockbroking. That led to my contacts with customers who were importing electronic goods from Thailand. I went into the depth of the television market and studied the market as well as margins in prices that led to an understanding of value chain. We sold televisions in the market and had done a good study for profit sharing models also. I had technical knowledge of electronics. I visited China and studied product manufacturing chain there.
Then in India, I contacted the dealers and formed the distributors’ network. The processes generated questions and led us to explore the answers within. The initial investments were done by us only which included funds from family property. We had to raise funds from banks too. We started with one crore rupee capital investment. It began to grow, and I had added my co-founders from my family. Mr. Manish Patel and Dharmesh Patel. They also invested some amount. And we developed our Brand. We had no visions for trading; had to make “Abaj World” a meaningful brand. We had aimed to place our brand in such a way that it provides luxury products at an affordable price, create value and catch up with the market. As a company, we had also appointed KPMG in our system for management consulting in 2016.
Que- Initially, were all your manufacturing and assembling done abroad? What is special about ‘Abaj’ products?
Nirav- Yes, we did all of it from abroad itself. We had ‘Dixon Technology’ as our partners in India which gave us the supply and a company named ‘Treeview’, was there in Thailand as our partner. The product designing and sourcing part were done by us.
Our sole aim is to provide the product with best of quality and affordable price. With three years warranty, our products have A+ grade panel, and we use box speakers. The components made are technically sound and the failure of the products till now is less than 0.5%.
Que- How do you see Xiaomi as a competitor as they are outcompeting most of the electronic brands in the world?
Nirav- Their all strategies are online based and whatever we do, is mostly offline. Our brand purely functions on distribution. There’s a world of differences between a Distributor and an online brand. We are planning a 3.5 mm LED. That’s how the competition works. If one has something better, the other one has to put efforts for the best. It makes the market exciting as we work towards the betterment of the product. We have retailers and distributors as our backbone, and so, we are planning to double them up to cope with the competition. We have hired skilled employees so that our brand acceptance is increased by the development of the front network, product positioning etc.
Que- As recent surveys and studies show that electronics market is profoundly affected when it comes to the difference between offline and online modes, don’t you think that you might be stricken if you don’t focus on the online selling of your products?
Nirav- We are still on our way of strategies when it comes to online mode. We are planning to launch three new products exclusively for online selling. Another alternative can be similar to what T.C.L has done; they have created a separate brand. Similarly, we can launch a brand only for online selling and marketing. These plans are still being worked on. I have to make sure that the dealers and distributors associated with us are not facing financial traps while we switch to online modes. These kinds of tragedies happened with similar working companies, and so, their negotiations were paused and risks resulted in adverse outcomes. So, we need to be alert about them.
Que- Can you tell us about the manufacturing plant which you are going to start within few months?
Nirav- We have taken help from KPMG in deciding the location of our manufacturing plant. They studied our marketing, brand building, and manufacturing strategies to scale our brand for about six months and also observed our Digital strategies for the overall growth of ‘Abaj’ as a group. They helped in making us digitally enabled for the exponential growth. And we follow their implementations till now. We have requested the state government to provide with necessary benefits. After the execution of GST, there were no excise benefits in any state, so, we finalized our plant in Gujarat itself after comparing all places.
We are on our way to the construction in 50,000 sq. feet area. Machinery is on the way as all the shipments from China are done. We will be starting our production July onwards. 50,000 units per month will be the capacity of manufacturing plant in phase 1 and we are planning to increase the capacity to 1 lakh units per month in phase 2.
We will be manufacturing for other brands too. As we follow Make in India, we are welcoming all those who are deprived of manufacturing plants.
Que- How the project of Make in India has helped you out in your work?
Nirav- Not only under Make in India, but we are also getting benefits from many policies of state and central government. We have a considerable advantage of Make in India as we don’t need to pay GST for next ten years. We are getting the capital subsidy and production subsidies from the government. Also, getting full cooperation from government officials. Make in India is helpful in developing technological ecosystems. They have on one hand restricted the imports by imposing heavy duties and on the other hand, are benefiting the local manufacturers. We are happy to utilize this programme.
Que- What was the biggest difficulty that you faced while setting your company? Was there any incident when you felt like giving up?
Nirav- Every business has initial challenges. One faces financial difficulties, the market also takes time to accept the new brand. But, these difficulties are the ones which take us to the desired goals.
None of us felt like giving up in these years. Whenever there were times of difficulties, the voice within said that we can do. And the team had always worked with double of energy. We get enthusiasm from the market, our supports and dealers too. We are heading towards our vision.
People are satisfied with our service, quality of goods, and commitment. Price is uniform and constant for all. We are heading towards our vision.
Que- Are you looking up to the funding from V. C.s as every startup does in India?
Nirav- Currently, we raise funds from our friends, family, and bank. We are looking for V.C.s too. Every door and window are open for fundraising.
Que- What things do you keep in mind, while hiring in your Company?
Nirav- When I hire, I take references from the market and form initial bonding with the employees. I also keep in mind that they are also technically sound. I make sure that they are committed to the company and are loyal.
Que- What one, as an entrepreneur should take care while setting up a manufacturing plant in India?
Nirav- The most critical decision you take while setting up your manufacturing plant is the assessment of the suitable location. One should see the government policies and workforce availability in that location, which might add to the productivity of the plant. One should take help of experienced ones while planning and use local human resources to increases the efficiency. Many other factors such as market share, transportation access, demographics and proximity to dealers come into play. All these make the foundation. The other thing which is very important is funding plans, for that the investors should be chosen such that they stick to the plan.
Along with that, the core values of a business, like integrity, commitment, teamwork, and leadership should be developed among employees. Every member of the team must work towards the same goal and the same mission.