Sunday, Oct 22, 2017
Conglomerate | Middle East | Kuwait

Morad Yousuf Behbehani Group

Flexibility key to luxury retail growth


9 months ago

Abdul Mohsen Behbehani, Director (left), and Shahzad Gidwani, General Manager – Trading Division (right), of the Morad Yousuf Behbehani Group
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Abdul Mohsen Behbehani & Shahzad Gidwani

Director and General Manager, Trading Division, of Morad Yousuf Behbehani Group

The Worldfolio sits down with the leadership of the Behbehani Group, one of Kuwait’s oldest private companies and was the first to bring air conditioning, TVs and many luxury items to Kuwait, and has set the standard in retail through its growth.

 

Focusing on the region, the Behbehani Group has operations throughout the Gulf region…

Yes, our primary base is here in Kuwait. We have a partnership in Bahrain run completely by Bahrainis. We recently entered the UAE market by opening our first boutique in Dubai. We have grown across the region. Currently we are not looking at Saudi Arabia or Qatar as target openings.

 

GCC countries from time to time advocate for a closer union. With a more cohesive GCC, do you view more opportunities for Behbehani?

Absolutely. For us to enter Dubai, for example, it was quite easy through the GCC. There were no bureaucratic hurdles

 

Regarding the retail sector in Kuwait, we know that at Behbehani you specialize not only luxury but in mid-luxury as well. Do you view a change in the market trends? Are you switching your focus to the mid-level segment?

Our core is still luxury. We have invested in the mid-level market, though our primary target still remains high-end luxury—since day 1 with our partnership with Omega. We have a group of mid-luxury brands that are selling, so we are focusing on having them sell more. The growth has been very good despite a slower market.

Kuwaiti youth have high access to money and are very fashion conscious. They like the mid-level brands because the articles they buy are quickly interchangeable. People do like to have a greater assortment of articles such as watches, and the mid-level brands work for that market.

 

As you said, your base is here in Kuwait. When you include the foreign expatriates here, Kuwait is an extremely diverse society. How do you incorporate that into your business focus, as you not only target Kuwaiti nationals but everyone?

Take Tik Tok, our watch store brand which has been growing here in Kuwait. For the opening we chose a Philippine lady as a brand ambassador to connect the local Philippine population with the brand. It worked. For the Indian population, we sponsored Indian-based functions, all here in Kuwait. Last year we changed our brand ambassador to a young Kuwaiti gentleman who sings in Hindi, so we gained yet another target. We’ve got the Kuwaiti youth interested in a man who sings in a foreign language, and we’ve got the Indians so excited to have a Kuwaiti sing in their language. We have a multi-pole appeal throughout our diverse brands and our diverse brand ambassadors.

 

How did the Behbehani Group adapt to this new diversity in Kuwait, as this company has been around since the 1930s, before Kuwait became so diverse.

Kuwait has always been one of the most open societies and markets in the Gulf. Kuwait has always had relations and trade with Pakistanis, Indians, all nationalities.

 

Since the discovery of oil we have seen a rapid increase in many different nationalities in Kuwait. How did Behbehani adapt to the change?

We adapted with the change. You must change with the change, or the change will change you.

How would you describe your business today with the drop in oil prices? How has this affected the economy and your operations?

We are off target, but we have done better than expected. The trend is not that bad. We started off the year at 12% off target, we are currently at 6%, and we hope to be clear by the end of the year. Economists show that the price of oil will not recover next year. People in Kuwait will hold onto their money and won’t want to spend.

Luxury manufacturers can see a trend in the way Kuwaitis spend.

 

Is this a change in habits based on a current situation, or do you view this as a cultural change?

It is not a cultural change yet, but it can become one. Today it is a reaction to the situation. Will this lead to a permanent change? That is a question nobody can answer right now.

 

This is a family business, which is a rather unique Kuwaiti model when you compare it to the American corporation with many shareholders.

Few decisions are emotionally based here due to what this company means for this family.

Kuwait has a smaller, wealthier, and flexible economy. There are many companies in Kuwait who have the freedom of flexibility in managing their businesses because of the family identity, rather than catering to corporate shareholders.

 

As we know, doing business in Kuwait is all based on partnerships. We would like to know more about this element from your perspective.

The bedrock to our social interaction is the Diwaniya. Many clients come see us at our showrooms, and also come speak to our family at our Diwaniya. It is a very different way of doing business than sitting in the conference room. It’s more vigorous because it involves both spheres of doing business on the record in the corporate boardroom and off the record in the Diwaniya. People seek to expand their networking via the Diwaniya which is a unique part of Kuwaiti culture.

 

You are one of the oldest companies here in Kuwait. When foreign companies come here to Kuwait to invest and form partnerships, how does Behbehani stand up?

We have joint ventures with Ericsson, United Technologies, and numerous other corporations. We are open to all markets and all types of operations, drawing on our experience and flexibility. It is very important to have both – to draw on experience but also to be adaptable to the changes. We are very adaptable, which is why we have joint ventures with such diverse clients. The fact that we work with everybody makes it easier for us to shift gears when we want to.

 

What is the most common misconception or misinformation that people have about Kuwait?

People don’t know that there is history in Kuwait, and a strong business history in Kuwait. We know how to do business and do not need to be taught. People have to come to Kuwait with an open mind. We know our market, and we know that what works in the US, Japan, or Europe, may or may not work here. That’s where our partnerships are so strong, due to our company’s history here. Our company was the first to bring air conditioning, TV, and many luxury items here in Kuwait.



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