Planning to invest Rs 400 crore in India over the next five years: Adel Sajan of Danube Home
E Kumar Sharma October 9, 2018
Dubai-based Danube group, which claims to have a turnover of around $1.2 billion, is making its foray in India with home improvement brand, Danube Home. Speaking to Business Today, Adel Sajan, the much-travelled and young director of Danube Home, talks about the opportunity that the group sees in India and its investments plans. The Sajan family originally hails from Mumbai and Adel Sajan frequently visits the country. Investing in India, he says, is like homecoming. Edited excerpts.
BT: Can you tell us a bit about Danube, its operations, scale and size?
Sajan: The Danube Group is divided into three major verticals - home improvement, property development and building materials. Last year, we did a total business of $1.2 billion. I would like to focus more on Danube Home, which is entering India. It is one of our fastest growing companies and we are quite excited about entering India because we all know, it is a huge market with growing income and a growing young population. We feel there is great opportunity to be in India at this time. Our plan is to have a grand launch of our first store in Hyderabad on the 19th of October and a soft launch before. We want to be ready for Diwali, which comes in early November and typically Diwali shopping begins a little earlier.
BT: Why did you choose Hyderabad for the first store?
Sajan: We conducted some studies before deciding where to open the first store and we went to different parts of India and felt that Hyderabad was the right choice to open the first store. The government there was very supportive. Plus, we also had an opportunity to be in one of the largest mall in India, the Sarath City mall, which is slated to open in Hyderabad. We have taken 60,000 sq feet space in the mall.
BT: You are based in Dubai and have travelled widely; tell us a bit about your India connection?
Sajan: We have always being eyeing India. We are from Mumbai and therefore going back home to India and setting up the brand there would be the proudest moment.
BT: How much investment are you making in the first store and what is the subsequent investment plan for launching other stores across India?
Sajan: It will be around Rs 40 crore in the first store. Over the next five years we want to open a minimum of 10 stores in India. With each store, at Rs 40 crore, we are talking of Rs 400 crore investments in India over the next five years. We are already in talks for space in Gurugram, Bengaluru and other regions. But the focus right now is to set up the store in Hyderabad. Give it three to four months. Make sure we have the right mix and the right model and then move into other regions.
BT: One can always argue for and against the timing of the foray into a market, but what would you say were the triggers for choosing this time to enter India?
Sajan: Overall, we see a growing young population and an increasing spending power in India. Add to that, now with GST (Good and Services Tax) coming in, things are a bit more regularised and much easier for international brands to operate in India and get a fair ground to compete with others in India.
BT: What product ranges will you be offering in the upcoming stores and at what price? Also what are your sourcing plans?
Sajan: Our products are defined under three major categories - living, bath and garden. Living would be - furniture, home decor, chandeliers, carpets, curtains and everything that goes inside a house. Bath would include Jacuzzi, shower rooms, and all the bathroom accessories. Garden will be garden chairs, grass carpets. In short, we will have anything that one will need for a house. We see India as a very value-for-money market. There will be a complete range and one that also offers affordable luxury. For instance, I could be selling a gazebo starting from Rs 5,000 and going right up to Rs 200,000. Same would be the case with furniture. For instance, there would be sofas from Rs 15,000 to Rs 100,000. We will have furniture manufactured in India, China, US, Brazil, Vietnam, Malaysia. We buy our products from about 21 different countries and all the international and locally-made products at different price points under one roof. We have also tied up with lot of companies locally. For instance, we are buying a lot of electrical items locally, there will also be sofas manufactured in India.
BT: How do you plans to take on competition? Ikea is just next door and there is competition from local players too.
Sajan: We do not have a direct competition because as one with a concept selling living, bath and garden, we feel, we are quite uniquely placed. If you look at other players in the market, global or local, they will sell you a sofa or a bedroom but not the wall paper or customised curtains... for a house, one wants a complete solution and we have that complete product mix and that I think, this makes us unique and gives us an advantage over competition, both in India and in other markets. We also offer it at a price that is not expensive, with a quality that comes with a warranty and the customer need not go around to 10 or 20 different shops for doing the entire shopping for the house.
BT: How do you see yourself in India, a year from now?
Sajan: A year from now, we should be opening our third store in India. We are just waiting for the Hyderabad store to open. We will run it for a couple of months, see the traction and if we get the positive response then within six months we will open another store in India.