Seeking a better life

Easa Saleh Al Gurg has ambitious plans for its home appliances retail chain, Better Life, in addition to its burgeoning distribution network.

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By  Michael Thorne Published  September 13, 2006

|~|Dayal200.gif|~|Ajay Dayal, general manager, retail and marketing at UAE-based Easa Saleh Al Gurg, which operates the Better Life retail chain.|~|Easa Saleh Al Gurg, the parent company of home appliances retail chain Better Life, is one of the industry’s major players in the UAE. The company initially rested its business interests on working as a distributor for Grundig, Siemens and Skandinova. However, following the bankruptcy of Grundig in 2003, Easa decided to refine its channels and enter the UAE’s home appliances retail market directly, opening its first Better Life home appliances concept store in the same year. The company now has ten stores in the UAE and one in Oman, with additions to this portfolio set to open in Dubai and Abu Dhabi later this year. Easa took the decision to focus entirely on home appliances, backing away from entering the consumer electronics market, in order to create what it considers to be a unique retail concept in the markets of the UAE and Oman. “When we looked at the market and saw how people were buying appliances we realised there was a huge demand that was not being fulfilled,” Easa Saleh Al Gurg’s general manager, retail and marketing, Ajai Kumar Dayal, tells ECN. “As the home appliances market was structured, the retail model was fragmented meaning that a shopper would either have to move around between different outlets in order to find what he or she was looking for, or visit a hypermarket or one of the big consumer electronics stores.” By creating the Better Life concept retail chain, Easa also immediately provided brand partners with a direct route-to-market for their products in the Middle East. The stores cater to the premium sector of the market, focussing on mid to high-end home appliances, value-added services and in-store customer support. “Value-added services are key to our retail offering. We realised from the outset that selling appliances demanded a different strategy than consumer electronics. Brown goods are based on impulse or pleasure buying,” Dayal explains. “High aesthetic elements are increasingly influencing the market for white goods, however the underlying factors are not looks – they are what a product can offer in terms of specifications.” Easa promotes Better Life as a lifestyle store; a tough undertaking in a region that boasts such a large and ethically diverse expatriate population. Dayal explains that the company sets out to meet this challenge by providing intensive training programmes for sales staff as well as in-store promotions to demonstrate the benefits of different technologies to consumers. “We have achieved significant sales with the major brands in our portfolio including Siemens, Electrolux, Zanussi, Fisher and Paykel, and Vestfrost,” he says. Acting as distributor for these brands also means that Easa is responsible for after-sales service support, not only for products sold in its Better Life chain but also those sold by other retail and wholesale partners in the company’s extensive distribution network. “Here even the reputation of the hypermarkets is very much linked to the kind of service we provide,” says Dayal. “We have a great sense of responsibility when dealing with high-profile dealers because we have to provide the level of quality and service they expect.” Easa’s most recent initiative has seen it tap the property construction boom that has taken hold of the GCC in partnership with German kitchen design and installation company, Alamo. The partnership sees Easa acting as the exclusive distributor for Alamo, which has established its own manufacturing plant in Dubai’s Jebel Ali Free Zone. “We were already supplying a number of new residential tower and villa developments with home appliances so we decided it would make sense for us to supply the kitchens as well, becoming a one-stop shop for developers,” says Dayal. Easa launched the initiative around six months ago and Dayal claims that it has already significantly bolstered the company’s business in the UAE. “Last year, our business consisted equally of wholesale, retail and special projects,” he explains. “This year, I expect this latter segment to generate more business for our company. However, our retail arm continues to expand rapidly, with new stores opening all the time.” Dayal does however concede that home appliance retailing places additional burdens on a distributor’s supply chain management, given the lengthy lifecycle and extended warranties offered in conjunction with many white goods. “This is one of the major challenges we continue to grapple with,” says Dayal. “Maintaining after-sales services is not easy: we have a huge set up including 20 full-time technicians and seven trucks. “One of the main reasons distributors often steer away from establishing a retail arm is because of the effort required. It’s really a long term relationship that you must establish with your customers. “It complicates your supply chain management, particularly in regards to maintaining a spare parts inventory. It represents a significant cost in terms warehousing space, management and time.” Dayal adds that the size of many large domestic appliances, such as washing machines and fridges, makes managing stock and inventories particularly difficult. Gauging market demand is essential since only certain stock quantities are economical in terms of the margins they offer. Despite these challenges, Dayal claims that business is booming and the future remains bright for Easa and its partners, with a growth forecast of 80% to 90% for 2006 on the back of the company’s partnership with Alamo and its retail expansion. “We anticipate at least 20% to 25% growth per annum over the next five years,” he boasted. Regional expansion could be on the horizon, Dayal suggests, with Easa open to the idea of setting up a franchise business in selected markets. “We are currently weighing opportunities in key matkets across the region. Franchising is a business model that we are seriously considering because we have the expertise and the products that would appeal to consumers across the Middle East. There are huge retailers doing phenomenal amounts of business in all the markets but what we are trying to do is identify a niche and provide real quality within our sector of the market.”||**||

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