Quality & Compliance Key for Global Brand Success: Mr. PNC Menon, Chairman, Emeritus
April 18th, 2019
•Real estate has traditionally been a micro – market business. Whosoever tried to become national player, have failed. How could SOBHA buck the trend in India?
First of all, it is about our company’s philosophy – do not break any laws; do not cheat taxes; do not deviate from the plans; and do not compromise on the quality at all. And, we do everything ourselves. We do not give it to outsiders. That is how we have complete control over quality. And, as long we are in a position to transfer that knowledge to a team of professionals with checks and balances, we can go anywhere in the world and do business as a brand.
•Most of the brands won’t go for in-house expertise as lesser liabilities saves you during slowdown. SOBHA, on the contrary, has done better in downturn. Is it because of backward integration?
Backward integration definitely helps and my reason for backward integration is that I have total control over quality. I come from an industry where I had been in contracting for the last 40 years. Real estate for me has been only for the last 20 years. Since beginning, I have been working on very high-end contracts, including design. So, I have the knowledge coming from the grassroots level of contracts. Eventually I thought I should do real estate also while doing contracts outside.
I must admit here that contracting is not a great business because there is huge competition. Even if you are selected after so much of competition, they will still negotiate the price. So, you cannot deliver the quality. I am not at all keen on contracts now. In India, we are still doing contracts, but in the Middle East, I don’t want to do contracts. Similarly, I cannot give my contracts to somebody else because that is the primary strength of this company.
•Of late, there is quest among the Indian developers to go global and emerge international brands. How do you position yourself?
If you want to be a global player, in India also there are only a few destinations. The metros, like Delhi, Mumbai, Chennai, Bengaluru and a few other destinations like Hyderabad. You cannot go to more than 10 destinations. Even though opportunity is there, we have got 650 districts, and we can do at least 100 districts. I don’t know but my son looks at it very differently. And he is quite capable with his business plans. But my personal view is not more than 10 cities in India. In Middle East, we won’t do business in any other destination than Dubai. Any geographical expansion has to be some other country. And we have huge bandwidth. People believe in brand SOBHA because they know half of my wealth goes to charity, and if you are doing that, you won’t cheat. That is the difference between others and us.
•So, what are your global plans now?
There are two beautiful places that are good for the real estate, even though market is not doing well. One is the UK and I think we should be there in the UK, possibly in 2020. That will be the first move. Another move I would like to make is in the US, where I find huge potential. I am raising a team of hardcore professionals for the future expansion. Finding the right people is also challenging in your expansion plans.
•There are certain Indian companies that wanted international recognition and hence, have tied up with global brands. Are you also looking at that model or you want SOBHA to be a brand with which others aspire to associate?
I believe in organic growth and would not like to go to any other brand. I am not in a hurry. First, I am looking at selling Dubai and Indian products in the UK and the USA market. It will be purely sales offices. But that will be the beginning of our long-term global plans. As a brand we are already accepted. Today, Dubai is an international city and you can ask any buyer in this market.
•Brand SOBHA has international acceptance now. Which are the other global cities you would like to test the waters, moving forward?
China is going to be a big market for us, like India, Saudi Arabia, UAE and UK. If you ask me, honestly these are the five places where we could have 80% of our sales happening. We don’t want to go to 50-60 countries. We would want to focus on these five geographies, starting with UAE, India, Saudi Arabia, China and UK.
•As of now, you have plans to start your marketing offices in these key geographies. But moving forward, would you also explore real estate developments over there?
Not in China, as it is a different market. It is difficult, because of the language barrier and then their philosophy. I will not compromise on my philosophy. And I am not here to fight with people. For real estate developments, I would look at UK and over a period of time would definitely go to the US.
•The focus would be only on the residential developments?
I have been successful only with that. I only know how to make beautiful homes. I am not saying I will not do commercial real estate at all, but primary focus will be residential real estate. We have mastered this segment. The world is changing fast and tomorrow dynamics could also change. For example, now we are seeing advent of new technology like robotics in construction. So, we will be straightaway getting into robotics for construction, with no headache or hassles.
Edited excerpts from the interview with Ravi Sinha, Editor-in-Chief, Track2Realty.