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Wed 8 Jan 2020 04:48 PM

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How Kibsons took on the supermarkets in the UAE and won

Halima Jumani, head of operations at the online fruit, vegetable, dairy and meat distributor reveals how the company has grown in the face of big challenges

How Kibsons took on the supermarkets in the UAE and won

Halima Jumani is head of operations at Kibsons International

There’s nothing wrong with a little healthy competition – and it doesn’t get much healthier than when you’re talking about fruit and vegetables.

Kibsons was founded in 1982 in Dubai’s Fruit and Vegetable Market. For almost four decades the family-owned business served the emirate and beyond, sourcing produce from all over the world. The rapid expansion of the business saw more and more shops acquired and staffing numbers grow from an initial 20 up to 600.

However, the growth of supermarkets and hypermarkets began to take its toll on the bottom line as they were able to be more aggressive in their negotiations and pricing structures.

Head of operations, Halima Jumani, tells CEO Middle East: “Our distribution department, whereby we catered to the different supermarkets in the country, was struggling to break even. This was because of the bargaining power of the supermarkets getting stronger.

"At that stage we were forced to look at our business from a strategic point of view and we went back to our basic strategy and asked ourselves, ‘what is our value proposition’. That was simple, our value proposition was that we were the first points of contact when it came to quality and price.

"We asked ourselves, ‘who is the real customer out there who would appreciate this value proposition and could benefit from it?’, ‘is the supermarket the right customer for this?’”

Blueberries: the new popcorn

Something had to change. And so the seed was planted. It was nurtured purely by chance as Jumani settled down to watch a movie one evening. She explains:

“One night I was watching a movie with my husband Jamal and I remember I had four tubs of blueberries next to me, my ‘popcorn’ for watching a movie. I turned round and said to Jamal, ‘how many people in Dubai could sit with four tubs of blueberries and treat that as popcorn?’ Even if you are a CEO of a company and have a great salary, AED22 a punnet in Spinneys? You could afford it, but you would budget it for the week.

"Wouldn’t it be nice if we could extend this privilege to all those kids out there, whose parents actually understand the value of healthy lifestyles like we do. What started off as a service for friends, from a Excel spreadsheet, quickly grew into a basic website and then into the makings of the delivery service as we know it today.

One issue that weighed heavily on Jumani’s mind, however, was finding employment for the staff who were employed in merchandising Kibsons to the large supermarket chains.

“When we decided to walk away from the supermarket business, what bothered me was how get the staff other jobs, because Bangladeshis do not get a fresh visa unless they go in freezones. These guys have been with us for years and I knew so much about them, to have them go back home and suffer was something I was not happy with.

"The home delivery segment gave them a job. Initially it ticked my boxes of giving 50 people a job and giving families a chance or an option for healthy living and I was very happy.”

Hitting targets

An evening of celebrations to mark the start of a new era ensued as Jumani and her husband treated staff to a party in Mirdif City Centre Mall. At the end of the night, Jumani explains, her husband agreed to throw another bash once they achieved 1,000 deliveries a day.

It was an ambitious target, one that Jumani felt was possibly too ambitious.

She explains: “I remember on the way back home saying to Jamal, ‘if you didn’t want to give a party to them, you could have just said, why set them a benchmark that’s so high, they will never achieve’. He said ‘we are going to achieve it’. I don’t know if he really believed it or he kept me motivated. But whether it was the next February or the February after, on February 14 there was a Bollywood offer at the theme park (Dubai Parks & Resorts).

"We did achieve the 1,000 deliveries-a-day and I took all my employees, all the drivers, all the pickers for a fantastic party. We had a whole day of fun.”

That target has since been dwarfed, with the online fruit, vegetable, dairy and meat distributor currently fulfilling over 2,500 home delivery orders per day. While a new 130,000 square foot head office and cold storage warehouse in Dubai will see that number increase further to 10,000 orders per day.

The new facility will triple distribution capacity, which currently stands at more than 250,000 kilograms of fresh produce daily and it will also triple its meat processing capabilities. While the new head office is expected to create more than 200 new jobs, taking the total workforce up to 600 employees.

Cautious expansion

But Jumani admits it may not be big enough.

“This facility was conceived about five years ago at the time when we did not have home delivery as part of our foreseeable future. It was primarily designed for our wholesale segment of the business. When we moved into the facility, given the fact that home delivery had become so huge, a piece of the facility had to be dedicated to home delivery, which we are very pleased with because it has allowed us to grow, physically into this space.

Having said that, it deserves its own area, which is customised especially for home delivery, so we could take it to the next level of optimisation and we could have a custom-built facility, exclusively for this segment.

We are thinking about that very seriously. We have many ideas and we have a whole plan almost complete and now we’re working towards how we can make that idea come to life.”

Jumani reveals plans to expand into product categories, including pet care, home care and baby care.

However, she says that while regional expansion is a goal in the future, she’s happy to watch the business grow slowly.

“The journey is so important,” she says. “Rather than agree to just go out there and multiply and open something in Saudi or somewhere else. I think we really want to be good at what we do and hold ourselves accountable to the originally promise that we started out with. If we lose that core, I think something about Kibsons changes and that’s not something we want.”

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