The ‘ABC’ Way of Redefining Elegance

Kochi: Situated near Toll Junction at Edappally in Kochi is a multi-storey studio for everything that is chic and in vogue to make a house appear glitzy and dream-like. The sheer opulence is overwhelming and its floors and walls are dotted with ceramic wares and bath styling accessories, designed to redefine all existing concepts of extravagance. For a person who walks into the studio of ABC Emporio for the first time, the luxe showroom could be most enthralling. Certainly, more than the wares that are on display what would catch one’s eye is the elegance the interior designer has imparted to this store complementing the majestic architecture of Emporio, making it truly a must-visit place in Kochi.

Well, the 40,000-sq.ft. showroom is the latest premium store of the ABC Group led by Group Managing Director Muhammed Madani K. The business journey which led to the setting up of Emporio began from a mere 1000-square-feet small sanitaryware shop at Taliparamba in Kannur, started by Madani 20 years ago. Madani scaled heights of success through hard work and by sticking to work discipline and ethics. Today, Emporio showcases more than 100 world-class brands, including Armani, Gessi and Laufen for the first time in Kerala. “Although Emporio is just another business of the Rs. 450-crore-plus ABC Group, it gives special emphasis to augment the growth of this sector by providing international sanitary and decor solutions under one roof,” Madani said in an interview to Destination Kerala.

Starting off as a small showroom at Taliparamba in Kannur in 1998, ABC Group under Muhammed Madani K has grown over the years into a retail giant in Kerala offering world-class brand names in ceramics, tiles, sanitaryware and bath fittings. Its premium luxe showroom, ABC Emporio, in Kochi reflects Madani’s futuristic vision which helped him evolve an impressive portfolio catering to different segments and establish the Group’s presence abroad.

With two more Emporio showrooms to be opened in Thiruvananthapuram and Kozhikode, it is gearing up to become one of the biggest home-grown brand names in the premium market of ceramics, tiles, sanitaryware and bath fittings. The ABC Group’s impressive portfolio also includes five more retail outlets in Kerala, an Original Equipment Manufacturer (OEM) concern and export & import arm in Morbi, Gujarat, distribution network in Kerala with 600-odd sub-dealers, another export & import division in Kochi and overseas concerns in Dubai, Qatar, Oman, Uganda, Tanzania and China. The story of Madani’s successful foray into ceramic and sanitaryware retail, which was rather an uncharted territory until he started off from North Malabar, offers a glittering example of entrepreneurial spirit which could bring about unimaginable results. Here are the excerpts from the interview with the man behind the outstanding success of ABC Group.

Can you tell us about the genesis of ABC Group?
ABC Group was established in December 1998 when I was just 22 years old. The first showroom was started in my hometown Taliparamba in Kannur district. It was a period of change in the construction sector as the demand for ceramic tiles and products was fast growing. Ceramic products were replacing existing flooring options like marble, red oxide and mosaic chips. However, there was a clear gap between demand and supply as there were only less than 50 ceramic products traders in the whole of the country. The traders then forecast that ceramic products would soon become the trend. And the beginning of the new millennium saw the prediction coming true.

Although the number of available brands was less, there was a growing demand for ceramic tile products especially in Kerala. And that realisation prompted me to get into the tiles and ceramic trading industry. Post-2005 witnessed the mass consumption of ceramic products though the demand for the products in the premium-niche segment fell somewhat since then. Our first store at Taliparamba was just 1000 sq. ft. with only two employees. Though my father and close relatives were entrepreneurs for long, this was one segment that none of them had ventured into until then. In fact, it was my idea to try our hands in the business of construction finishing and interior-related products.

What is the philosophy behind the name ‘ABC’?
Well, as I said, prior to me no one in my family or even among the local people had ventured into this business segment. I had the feeling that as a beginner, there was much to learn for me. Though I gained business exposure by helping my father in his stationery wholesale business, I had no knowledge about the sanitaryware and ceramic products business. I was just learning the ‘ABC’ of this business and I wanted to be candid about it and hence, the name ‘ABC’.

How much did you invest when you started off in 1998? And what is the current valuation of your company?
I remember it precisely. I invested Rs. 16,50,000. Out of that, the deposit for taking a place on lease came to around Rs. 4,75,000 and I had to shell out around Rs. 5 lakh for setting up the showroom. Eventually, I was left with a working capital of only Rs. 5 lakh. And in the last fiscal, our Group’s turnover crossed Rs. 450 crore.

It seems like ABC Group is a family-run business? Do you agree?
No. It is not like that. It is more like a team. This is a kind of business that requires building a strong relationship with the customer. Hence, we need to ensure that more personal attention is given to customers which, in turn, calls for more than a mere professional management. That is what my experience says. So the top management of ABC Group consists of family members and partners. We take our everyday business forward as clusters. And in the same business we have different segments like imports, exports, retail, distribution, sales and international operations. Essentially, these different clusters are for different target audience groups.

Could you tell us about the growth story of ABC Group?
We started off as just another retailer at Taliparamba. Then we expanded our operations by opening one more store at Payyannur in 2004. Later, in 2005, we started our distribution company – ABC Buildwares India Pvt. Ltd. After a lot of effort and hard work we were able to finally open a showroom in Kannur in 2008, and three years later another one at Kanhangad in Kasargod. We introduced ABC Emporio portfolio in Kannur in 2014. Essentially, we have differentiated the trade into various categories. ABC Sales Corporation is a portfolio dealing with medium and small range products which include paint, plumbing accessories, tiles and bathroom fittings.

ABC Emporio is meant for high-end, luxury and premium category of products. Soon we are going to come up with ABC My Home which will be positioned below ABC Sales Corporation. ABC My Home will cater to middle-class consumers in tier III towns. Also, ABC has the largest distribution network in this field with 100-plus employees. The turnover of our distribution company alone has crossed Rs. 100 crore. It operates in all the 14 districts of Kerala and has three depots and three administrative offices in Kannur, Kozhikode and Kochi. Our distribution network in Kerala involves 1200 retailers which, in turn, helps us enjoy the largest market share.

Could you tell us about ABC Group’s expansion to the Middle-East, Africa and China?
When I started off in 1998, there were only less than 50 manufacturing plants in India and the country was the eighth largest ceramic producer in the world. Twenty years later, there are more than 850 factories in India manufacturing ceramic tiles and related sanitaryware accessories, taking the country to the second position in the list of world producers of ceramic construction materials. In the meantime, Kerala’s retail sector grew by leaps and bounds. This was prompted by the influence and exposure of the Malayali diaspora in the GCC countries and other parts of the world.

Naturally, ABC Group, too, drew inspiration from this trend and grew its businesses. Yet another reason was that there was no other retail brand in the building material industry in Kerala. There might have been one or two in Thiruvananthapuram or Kozhikode. Our realisation that there was no such brand which had an all-Kerala presence led us to spread our wings all over Kerala through various sub-segments. All these along with the increased demand for Indian ceramics in foreign markets gave us the inspiration to tap the international market in 2009. Probably, we would have been the first among Indian traders who got inspired by the concepts of ‘Make in India’ and ‘trading our products outside India’. We chose those parts of the world where there is maximum demand for Indian ceramics. Besides, we had got industry support in the GCC and African region. In Qatar, our operations are managed by my younger brother Muhammed Shameem. Presently, we have four showrooms abroad.

What is your success mantra for business?
Tthe tagline of our business itself is ‘Make Relationship through Business.’ Satisfaction of both suppliers and customers is important to us. We give first priority to the satisfaction of all who associate with us. Our main values are relationship for life, teamwork for excellence, innovation and win-win cooperation.

What is your assessment of the business ecosystem in Kerala?
Kerala has one of the toughest business ecosystems, in my opinion. Rules and regulations and bureaucratic approaches have put in place certain limitations. And that is what makes the business ecosystem tough here. However, I should say that such limitations were a blessing in disguise for me personally because doing business successfully in Kerala has equipped me to do business in any part of the world and deal with any type of people. In fact, limitations faced by entrepreneurs, caused by political and bureaucratic practices, have not changed in any way over the past two decades.

Who would have found it easier to survive in the market? You in 1998 or a young entrepreneur entering the market today?
I think it will be tougher for the new generation entrepreneurs. Reason for that is, earlier, retail businesses were not as capital-intensive as they are today. I mean not all the businesses but at least some of them in mainstream retailing. Today, infrastructure cost is more and land prices are high. During my initial years in business, the economy and society in general were passing through a phase of growth. In the late ’90s there was sufficient space for one to survive. Take for example a customer in the late ’90s who visits a store to buy a glass tumbler. What he would have asked for was a plain glass tumbler. But today, the same customer would look for 100 options before making a choice. In my own case, I have more than 100 global brands at my ABC Emporio in Kochi. But customers still ask for more! That is the kind of massive change that has happened in the business.

Where do you see ABC Group in the next five years?
In the next five years, I visualise ABC Group as one of the most reputed retailers in the whole of the country. We will be one of the largest global enterprises with presence in 15 countries by 2020 to support ‘Make in India’. By 2020, we hope to become a Rs. 1000-crore company. Soon, we will set up new showrooms for ceramic products in Kasargod, Cherupuzha, Pazhayangadi, Perinthalmanna and Thalassery. We also have plans to expand our distribution network to Bengaluru and Coimbatore. The Group wants to make its presence felt all over South India and thus be known as a ‘South India Company.’ We will also make ABC Emporio an all-Kerala brand by opening its showrooms in Kozhikode and Thiruvananthapuram.

Do you plan to enter manufacturing?
Not now. I am a person who believes in backward integration. I started off in retail, then I began distribution followed by OEM branding and export. Of course, manufacturing is on the cards but it will take another few years. Before entering into manufacturing, I want to develop the market, infrastructure and people. So when we meet all the parameters like consistent demand, supply and productisation, we will enter logistics, warehousing and manufacturing.

How do you evaluate the current zest for entrepreneurship in the State?
So far Kerala has tapped the employment opportunities in the GCC countries, Europe and elsewhere in the world. At present, it has reached a saturation point wherein high paying employment opportunities for Keralites would no longer be available. People who receive huge pay cheques are in a state of high risk, for example, people who work in big oil companies. Workspaces in the world are increasingly keen on cutting down human resources with the onset of disruptive technologies like Artificial Intelligence and Internet of Things (IoT).

So, it is time for people to start cultivating entrepreneurial spirit because it has great possibilities. Also, instead of just restricting ourselves to the GCC countries, people of Kerala should spread further out into the rest of the world for enterprise building. We are one of the most educated and qualified people in the world. Most of us can speak more than three languages. Yet we speak more about unemployment.

We should remember that unemployment had existed all these years and there is no point whining about it or staging strikes against the government. What is more important is how we can step out into the world to work for the progress of our land. So what I want to tell is that there is a sea of opportunities around the world, especially for Keralites who have the knowledge and expertise to make use of them.

Besides, people of Kerala have an extra advantage over North Indians who are believed to have great business acumen. Most of us do not have customary food restrictions, particularly, when we travel abroad. If you go to Gulf countries you will find a lot of Keralites and lifestyle influences of the GCC countries could be seen in our State, too. Such influence has become a great resource for the people of Kerala.

What is your advice to the budding entrepreneurs of Kerala?
They should absolutely uphold values in whatever business they are into. Values like ethics, trustworthiness, commitment, responsibility, honesty and reliability should be of paramount importance. My own experience says that it is our values which function as the driving force because all my suppliers and customers respect the values of my organisation. Credibility is also an important factor. It is achieved through our honest activities.