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Last updated: 11 Jun, 2018  

Nirav.9.Thmb.jpg Chinese counterfeiting affecting India's domestic market, exports: CMD, Abaj Electronics

Nirav.9.jpg
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SME Times News Bureau | 11 Jun, 2018

From needles to toys, electronic gadgets, consumer durables, Chinese version of the same in India at a much cheaper price, said Nirav Patel, CMD, Abaj Electronics Pvt. Ltd., adding that Chinese counterfeit goods are affecting not only the domestic business and Indian market but also affecting the export market of our country.

Excerpts of the interview…

Please tell our readers about Abaj World and its entrepreneurial journey.
Nirav Patel:
It's a riveting story of success. Way back in 2012, the foundation of Abaj World was laid. Hailing from the small village of Kadi Taluka of Mehsana District of Gujarat, I graduated as BE (Electronic and communication) in the year 2011. I left the family business to walk my own path. After completing studies, I felt the need to make a name for myself outside my family owned real estate businesses. Then I decided to give the entrepreneur inside me a go and focused on starting my own business.

Starting your own venture different from a family business and harder than you initially think, but interestingly enough, it gets easier as you set a vision and work on it step by step. I started with share market trading but it was not a smooth start. After bearing a loss of 50,000, I decided to switch to stock Brokerage Company by the name SMC Global, which is listed amongst top 5 franchises globally. This was not enough for me. In 2010, while working for KAYNET I came across a customer who had imported LED TV from Thailand and was struggling with two to three containers for its sales. I helped him out and managed to sell those containers. While I had done this easily I thought that I could get into this venture. Also, I had placed one of the LEDs in my own office and perceived no difference between an LG, a SAMSUNG or this product which that customer was selling under the name of Smart View.

Giving it a serious thought I felt if China could establish itself as a strong player in the electronic goods market in India then why is it that our country is lagging. Why can’t an Indian brand be a game changer? I realized this lag as electronics had no base in India. The ecosystem was completely lacking. Also, there was no local manufacturing; electronic items were often being imported. Then and there I decided to step in. And this is how the seed of ABAJ WORLD was sown.

What are the products and services you offer and plan to offer in the future? What is your competitive edge?
Nirav Patel:
LED Televisions has been the primary focus of the brand. But now we are adding other categories as well. The company plans to introduce Air Conditioners, Washing Machines, Smart Sound Bars, Refrigerators and many other technologically advanced products.  We are constantly extending our portfolio focusing on innovation and technology that's why we call ABAJ - Ultimate Life's Thing. With our range of products, people will experience a whole new lifestyle in the affordable price tag. We are currently selling through our extensive dealer and distributor network. In future, we plan to sell our products online too.

The company will be competing on quality and price. If you look at the brands present in the market, the price range is beyond the reach of the middle-class consumers. We at Abaj will be offering quality products at an affordable price range. By positioning itself in a competitive yet affordable price band, Abaj will provide relief to consumers.

What is the current status of the Indian consumer electronics market? What about its prospects for this fiscal?
Nirav Patel: Consumer durables market in India reached Rs 1 trillion (US$ 15.45 billion) in 2017. The industry is expected to grow at 13 percent CAGR and reach Rs 3 trillion (US$ 46.54 billion) by 2020. Urban markets account for the major share (65 percent) of total revenues in the consumer durables sector in India. There is a lot of scope for growth from rural markets with consumption expected to grow in these areas as penetration of brands increases. Also, demand for durables like refrigerators as well as consumer electronic goods is likely to witness growing demand in the coming years in the rural markets as the government plans to invest significantly in rural electrification. Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the consumer market. 

Do you think Chinese counterfeit products is a threat to the industry? How to prevent it?
Nirav Patel:
Be it anything from a needle to toys, electronic gadgets, consumer durables, you will find the Chinese version of the same in India at a much cheaper price. The price of Chinese goods is 10-70% lower than that of Indian goods. Low price, bulk availability, and variety are some of the favourable features of the Chinese goods in India. Chinese products in huge quantity are put into the Indian market and adversely affecting the Indian units. Chinese goods are not only affecting the domestic business and Indian market but also affecting the export market of our country. Indian goods are being replaced by ‘Made in China’ label both in India as well as abroad. Made in China label is slowly capturing every segment of Indian market. 

The need of the hour is to support "Make in India" Initiative and boycott the usage of Chinese products. 

You are planning to open a 55,000 square feet manufacturing facility in Gujarat. Please elaborate.
Nirav Patel: The brand which has started its voyage with imports of LED TVs is geared up to set up its own state of the art manufacturing facility at Ghumasan Village, Taluka: Kadi, Dist. Mehsana (North Gujarat) to manufacture LED TVs. The proposed new plant will come up on SH41 State Highway, 50 KMs from Ahmedabad and equipped to produce 6, 00, 000 units pa of LED Televisions. In addition to LED Televisions, Abaj has also debuted in other consumer durable categories including ACs, Washing Machines and Sound System etc.

The company will invest about Rs.54 crores in this plant. The company today boasts of making volumes as high as 7000-8000 units per month. And definitely, this plant will double up the capacity.

The manufacturing facility is likely to be operational by July 2018. The investment in line with the government’s ‘Make in India’ initiative to produce energy efficient and innovative products for the Indian market. The land has been procured and by the end of first quarter of 2018-19 the first phase of the plant will be ready. In addition to building a state-of-the-art facility, we are committed to creating a world-class manufacturing ecosystem in the region, with a base of globally benchmarked vendors and suppliers, which will together generate over 100 new jobs, thereby accelerating the socio-economic progress in the state.

Please share your future plans with our readers.
Nirav Patel: Pan India Expansion: Abaj is currently operating in 8 states like Gujarat, Maharashtra, Punjab, Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Rajasthan and Tamil Nadu. Further, the company will be expanding operations in all major metro and non-metro cities including Karnataka, Andhra Pradesh, Maharashtra, Kolkata, Bihar, Jharkhand, Greater Punjab and Delhi NCR. The company intends to be present across India by the end of the year.

Revenue: The Company is growing at 259 percent annually and clocked revenue of over 60 crores last fiscal. It is expecting a turnover of 150 crores by 2018-2019.

Manufacturing in India: The brand which has started its voyage with imports of LED TVs is geared up to set up its own state of the art manufacturing facility at Ghumasan Village, Taluka: Kadi, Dist. Mehsana (North Gujarat) to manufacture LED TVs. The proposed new plant will come up on SH41 State Highway, 50 KMs from Ahmedabad and equipped to produce 6, 00, 000 units pa of LED Televisions. In addition to LED Televisions, Abaj has also debuted in other consumer durable categories including ACs, Washing Machines and Sound System etc.

The company will invest about Rs.54 crores in this plant. The company today boasts of making volumes as high as 7000-8000 units per month. And definitely, this plant will double up the capacity.

The manufacturing facility is likely to be operational by July 2018. The investment in line with the government’s ‘Make in India’ initiative to produce energy efficient and innovative products for the Indian market. The land has been procured and by the end of first quarter of 2018-19 the first phase of the plant will be ready. In addition to building a state-of-the-art facility, we are committed to creating a world-class manufacturing ecosystem in the region, with a base of globally benchmarked vendors and suppliers, which will together generate over 100 new jobs, thereby accelerating the socio-economic progress in the state.

R&D: At present, the R&D of Abaj Group is based in Ahmadabad. Also, we are planning to start the designing of products in China as it has world famous designers. The operations in China will commence in mid-August in 2018.

 
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