MP Ahammed transformed initial losses into a Rs 53,000 crore empire with Malabar Gold and Diamonds. Discover how he turned setbacks into global success.
Success is not merely a stroke of luck; it is the culmination of hard work, bravery, and the ability to learn from failures. The journey of MP Ahammed, born in Kozhikode, Kerala, is a testament to this truth. Despite facing significant setbacks in the early stages, he remained steadfast in his pursuit. Today, his empire, Malabar Gold and Diamonds, boasts an impressive valuation of Rs 53,000 crore.
Selling Agro Products at 17
MP Ahammed's entrepreneurial journey started at the age of 17 when he ventured into selling agricultural products. Unfortunately, this initial attempt ended in failure. Undeterred by this setback, he took on the responsibility of supporting his family after his father's demise, caring for his mother and five sisters.
Failure in the Spice Trade
At 24, Ahammed launched a spice and dried coconut (copra) business in Calicut, hopeful for success given the steady demand in the market. However, fierce competition proved challenging, resulting in failure and a significant losses, ultimately forcing him to close the venture.
Launching a New Business
Despite facing numerous challenges, Ahammed remained resilient. He closely studied the market and observed the impact of the 1990 Indian currency devaluation, which led many people to seek refuge in gold as an investment. Recognizing this as a significant opportunity, he made the decision to enter the gold trade.
Jewellery Shop in 1993
On September 17, 1993, Ahammed opened a 200 sq ft jewellery shop in Kozhikode, investing his remaining capital into the venture. He named it Malabar Gold, drawing inspiration from the Malabar Coast. Targeting Malayali expatriates in the Middle East, he formed partnerships with local businessmen and offered up to 15% interest on debentures, which could later be converted into shares once the business became profitable. This innovative strategy paid off, and the business rapidly grew, achieving Rs 16 crore in revenue in no time.
Business Challenges
Despite his success, Ahammed encountered significant challenges. The market predominantly dealt in 24-carat (99.99% pure) gold, which drove up manufacturing costs and prices. To remain competitive, he recognised the need for a solution that would allow him to offer more attractive pricing.
The 22-Carat Gold Strategy
Ahammed introduced 22-carat (91.67% pure) gold, which significantly reduced costs and provided better value to customers. He implemented nationwide sales of 100% BIS hallmarked gold at uniform prices and introduced 'Carat Check Analyzers' to verify purity. These measures helped build customer trust and confidence in his brand.
Malabar Gold
By 2005, Malabar Gold achieved Rs 500 crore in revenue, with 40% of that coming from the Middle East, despite not having any stores in the region. In 2008, he opened the company's first international store (the 20th overall) in the UAE. Four years later, in 2012, the company expanded into the diamond business and rebranded as 'Malabar Gold and Diamonds'.
Company's Growth
In 2013, the company celebrated the opening of its 100th store in Gurgaon, Haryana. Revenue soared to Rs 22,000 crore, reflecting an impressive 83% growth. By 2018, with 215 stores, Malabar Gold and Diamonds had established itself as India’s largest jewellery retailer by store count.
Global Success
Today, the Malabar Group is a Rs 53,000 crore empire, comprising 15 businesses that span various sectors, including real estate, luxury watch brands, home appliances, and shopping malls. Malabar Gold and Diamonds boasts over 350 stores across 13 countries, establishing itself as a respected name in the jewellery industry.
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