A large consumer electronics and related services retailer is planning to expand into India after years of increasing its presence in the European geography. India represents a massive growth opportunity with its expanding middle class
7 min read ABS expands to Saudi Arabia
A large consumer electronics and related services retailer is planning to expand into India after years of increasing its presence in the European geography. India represents a massive growth opportunity with its expanding middle class, but also poses significant challenges. The company must navigate regulatory hurdles, supply chain difficulties, and adapt to Indian consumer preferences, which differ significantly from its traditional European markets.
Background:
In terms of revenue, sales area and employees, Company ABS is Europe’s leading consumer electronics retailer and provider of related services. Its integrated online and fixed-location offerings reach millions of customers every day. The portfolio of brands and services enables flexibility in responding to the needs of different customer groups and different countries. The company has a very strong brand, which comprehensively networks its more than 1,000 fixed-location stores with online sales platforms in order to maximize opportunities from the growing omni channel customer. Another important part of the portfolio is its own brand Great Buy, offering an economically-priced option in most categories.
ABS has approximately 55,000 employees and generates total sales of about €35 billion.
Store Success:
ABS opened its first store outside Barcelona in 1993, expanding throughout Spain and into Italy in 1999. The company grew rapidly across Europe in the 2000s, reaching Switzerland, Germany, France, and Poland. Germany quickly became one of its largest markets.
Over the years, ABS had entered many European markets.
Facts & Figures Countries:
Country: Stores/ Employees
Spain: 399/ 20,686
Italy: 122/ 5,086
Germany: 107/ 6,319
France: 89/ 3,143
Poland: 81/ 3,180
Austria: 52/ 3,738
Belgium: 49/ 1,198
Netherlands:29/ 2,525
Sweden: 23/ 1,147
Switzerland: 25/ 854
Hungary: 36/ 1,495
Portugal: 10/ 462
Walking into an ABS store is different from walking into other shops. They are clean & uncluttered, yet offering a wide assortment of products and services. And that’s the same around all countries. You’re struck by the incredible location or structure that you’re stepping into. That ordeal of trying to find what you want, typical to normal retail stores, is instead replaced by calm.
While countless retailers have gone out of business or moved online over the past decade, ABS stores have only grown in popularity. They've succeeded by understanding the potential of good design and recognising how powerful a tool the physical environment can be.
Sustainability Commitment:
ABS is committed to playing a leading role in addressing the most important global challenges – for people, communities and the environment alike. The core instruments consist of how the company functions and how they guide employees on sustainability issues, enabling customers a more sustainable lifestyle with regard to consumer electronics.
To achieve this, ABS has developed concrete measures around climate protection, sustainable products and resource-conserving services, and it is clearly committed to the issues of diversity, suppliers and society. These measures are underlined by the commitment to important initiatives and networks such as the European Commission’s Sustainable Consumption Pledge.
ABS wants to offer customers an attractive experience across all channels – experience electronics. They believe this also includes supporting them in responsible consumer behaviour. Customers can therefore find own-brand Great Buy products, which are particularly sustainable, based on their product design. In addition, ABS also offers customers refurbished devices that contribute to the conservation of resources through their second use.
Own brand Great Buy products:
ABS wants to help customers live a sustainable lifestyle. But what happens when you cannot see the forest for the products? Especially when it comes to electronics, it is not always easy to recognize a sustainable washing machine or coffee maker. As a retailer, ABS is aware of the special responsibility to highlight a product’s sustainability over its entire lifecycle. They help customers make sustainable purchasing decisions as far as possible by providing them with product information and ensuring that products are comparable.
ABS’ aspiration: more sustainable products in the product range
What actually are sustainable electronics products? They include the use of recycled materials in production, the lowest possible energy or water consumption during the utilisation phase and the longevity and recyclability of the product. And it is ABS’ own claim that social and ethical aspects such as the protection of human and labour rights are also observed in production. ABS has set itself the goal of offering 6,000 sustainable products in stores and online shops by 2025 – currently they have around 4,900 such products in assortment. These include, for example, fridges, washing machines, ovens and dishwashers in the large household appliances category and hoovers and coffee machines in the small household appliances category. In IT hardware, they offer sustainable printers, PCs, laptops and computer accessories as well as smartphones and tablets.
Refurbished products: ABS closes the circle
With the growing range of refurbished products, ABS offers sustainability-conscious customers an additional opportunity to buy new technology in a resource-saving way. Price-conscious customers are also increasingly looking in the direction of refurbished devices, as these function both technically flawlessly and are in most cases visually indistinguishable from new devices. In the action field of refurbished products, ABS works together with selected partners and thus ensures that there are no unpleasant surprises for customers with the products on offer.
What is refurbished?
The word “refurbished” means “reconditioned” or “overhauled”. When we talk about refurbished electronic products, we are talking about devices that have already been in use – although the length of use is irrelevant here – and have been professionally refurbished by a company. Refurbished devices are always fully functional and, in many cases, cannot be distinguished from a device that is as good as new.
What process do products go through before they are sold as refurbished?
In refurbishing, used products go through the process of professional reconditioning. The devices are first tested for their technical functionality. If the test indicates a defect, the device is repaired, and the functionality intended for the product is restored. After a successful technical acceptance, all data on the unit is deleted, and it is reset to factory settings. The final step is external cleaning.
Finally, the condition of the used device is assessed (known as “grading”).
What is the condition and grade of these products?
Refurbished products may show minimal signs of use but hardly differ from new devices visually. All products have gone through extensive technical testing, are fully functional and are sold with original accessories or accessories that correspond to the original. This ensures that you can use the device at home immediately. Refurbished devices are usually classified in the grades “excellent", “very good” or “good”.
Refurbished products: An important contribution to the sustainable circular economy
By buying refurbished products, you give appliances a second chance. By doing so, you promote the longest possible product life and actively contribute to a sustainable circular economy. The reuse saves energy and resources that would be used to the detriment of the environment in the manufacture of new appliances.
Research the Saudi Arabian/Moroccan/Nigerian/Turkish (according to your group) electronic retail market, to provide clear recommendations to ABS about their proposal to enter this new market.
- What are the key drivers that motivate ABS to expand into that country? What makes it an attractive market, despite the challenges? Consider economic, demographic, and strategic factors.
- What is ABS’ competitive advantage? Why are they so successful? Describe their direct competitors in Europe as well as the electronics retail landscape in the target country. Can their competitive advantage be successful in the new market, in your opinion?
- To what extent should ABS maintain its globally standardized product offering in India? What are the advantages and disadvantages of adapting its product range and store layout to Indian consumer preferences? Analyze European customers versus consumers in India for this industry.
- Before expanding to the target country, what type of international strategy did the company follow (e.g., global, multi-domestic,
transnational, or exporting)? And based on your analysis, should they continue this strategy in the target country? Justify your answer.
- What are the major benefits and challenges ABS will be faced with when expanding into India? Take into consideration its product offerings, supply chain, and business model
