Electronics retailer Sharaf DG will not let the economic slowdown prevent it from pressing ahead with ambitious expansion plans across the region, says its Managing Director Yasser Sharaf. In an exclusive interview with Emirates Business, Sharaf outlines those plans, says the company has no plans to lay off staff and reveals details of its partnerships with other businesses.
Is the economic downturn affecting the electronics sector and your expansion plans?
There is some impact in the market as the number of tourists visiting Dubai has come down. However, people in Dubai and the other emirates are still spending. The main issue is bad consumer sentiment. The problems are really hitting the real estate sector, which is bound to undergo a correction. The UAE Government has increased spending and infrastructure development. What we need to change is the negative sentiment. If rents come down it will be good for us. Sharaf DG is expanding its retail network to Sharjah and Abu Dhabi in the UAE and to Oman and Saudi Arabia in the GCC region. We will open a 50,000-sq ft electronics shop in Sharjah within the next three to six months and are planning a 20,000-sq ft showroom in Abu Dhabi. Three months ago we opened a showroom in Bahrain that is doing very well. We get a lot of Saudi customers who cross the causeway for shopping. We are planning to open showrooms in Saudi Arabia, which is a youth-driven market. Despite all the talks about the economic slowdown Sharaf DG is going ahead with its expansion plans.
Are you planning any lay-offs?
We don't have any plans to lay off staff and there is no freeze on recruitment. We will be hiring 100 employees for new shops.
Traders have been complaining that finance is tight. Are the banks still offering finance to buyers of electronic goods?
Sharaf DG has linked up with the Dubai Islamic Bank and EmiratesNBD to provide finance facilities. These banks have counters in our shops and provide personal finance for the purchase of electronic products, especially laptops and LCD TVs. Many people use finance for these products. The banks have streamlined their financing terms and it takes three days to a week to get a loan. Ideally we would like to get on-the-spot loans for our customers. The rate of interest depends on the bank.
How does your alliance with the Union Co-operative Society work?
We have opened a 25,000 sq ft Sharaf DG outlet at the Union Co-operative hypermarket on Al Wasl Road. The alliance ensures a Sharaf DG footprint at another prominent address besides the existing ones at the Times Square Centre, Ibn Batutta Mall, Deira City Centre, Dubai Mall, Mankhool, Abu Dhabi Duty Free and Bahrain City Centre. The partnership will enable the society to attract a larger range of customers by offering an extensive range of electronic goods within its premises. This will put it on a level playing field with competing hypermarket operators such as Carrefour, Lulu and others and help strengthen its position in the market. Electronics is a high-volume, low-margin business. Due to stiff competition and the number of players in the market the average profit in electronic trading is just four per cent. We have many principals such as Nokia, Toshiba, Philips, Epson, Samsung, Acer, Canon, Panasonic and Kenwood and are open to new alliances. Sharaf DG is trying to be the main electronics destination in the region.
What promotions are you running for the Dubai Shopping Festival?
Our plan is to provide the best value for money. Our participation in the last DSF resulted in increased sales and revenues and we hope our participation will be better this year. It involves only minimal cost as the offers and schemes are provided mainly by our principals. Most of the electronic principals are participating in DSF through their retail agents.
Could you tell us about your branding and marketing, in particular the deal with the Roads and Transport Authority to name a Metro station after Sharaf DG and your corporate social responsibility activities?
The Dubai Metro station branding is part of our group's decision to invest in the community, it is not purely for advertising alone. The private sector has always taken benefits from the government and community and not giving anything in return.
It is a bad time and private businesses should give something back to the community. We take part in the Dubai Municipality's used computer charity programme. This project invites businesses and individuals to donate old computers to be refurbished and donated to needy members of society. Sharaf DG is extending its support by setting up collection points for computers at four of its stores.
PROFILE: Yasser Sharaf Managing Director, Sharaf DG
Sharaf has a master's degree in multinational commerce from Boston University. He joined Emarat in 1999 and later became the head of Sharaf DG. He has introduced multi-channel product distribution, designed business processes, created successful business plans and developed new businesses. All departments at Sharaf DG report to him on a daily basis. He is a board member of the Ship Owners Association and a keen reader and sports enthusiast with a particular interest in golf and football.