The 34-year-old businessman, son of Syrians who invested in the country for 44 years, assures that his business took advantage of the skinny chicken prices of the premises that the big brands left in the shopping centers to boost the expansion of his business. It considers that the still lifes that import electrical appliances compete unfairly for the exemption of import duties. He hopes that the impact of the sudden increase in freight from China has reached its peak, as it ensures that the country's economy begins to see the light at the end of the tunnel.
It all started on Colombia de Catia street. There Jonathan Ibarah's father, a native of Syria, started the business 44 years ago from where it gradually expanded, emphasizing the investment in stores in popular areas, where there is a higher population density and therefore, higher sales.
For 4 years, Ibarah has assumed the family business of his family and begins to work on updating and positioning the brand, with a fresh and modern image, through the refreshing of the logo. Today it is a corporation of 23 stores, of which 19 are in Caracas and the rest in Miranda, La Guaira, Carabobo and Monagas (and soon in Valencia), now under the baton of a young businessman, 34 years old. , with revolutionary ideas that seek to face the dramatic changes that the Venezuelan economy has undergone in recent years.
However, due to the change in the purchasing power of Venezuelans, the business adjusted. From being in popular areas, as part of the conglomerate of appliance stores that are located on the main avenues of populous areas such as Catia or San Martín, DA + CO takes a turn and seeks to position itself in a different audience and jumps to shopping centers .
“We did a whole store opening campaign in various shopping centers. We are in El Sambil, MultiPlaza El Paraíso, CCCT, Boleíta Center, Millenium, because there is a greater influx of public and DA + CO is a new brand in the market although we had already been in business for 44 years, a job of marketing and commerce changed. In the 80s, there was no digital marketing, only traditional media whose advertising investment was really very expensive. Now we adjust to the networks, ”explained Ibarah.
-¿Migration to shopping centers responds to the decline in the purchasing power of the popular class, which is the target audience for the home appliance market.?
- DA + CO was born as a brand and you have to work on it, for this it is important to have a store in a shopping center because thousands of people move every day. We opened stores in the East of Caracas because given the economic situation of the country, the purchasing power was left in the middle class, upper middle class - in marketing terms - since with dollarization and hyperinflation, the salary of the class was pulverized popular.
Ibarah explains that at this stage of the business, intensive brand management work is being carried out (branding), with the aim of making it known, desired and achieving a positive image among consumers. "Having a store in a shopping center is an important branding given the traffic of visitors registered, because there are up to 4 thousand people who, even if they do not buy, will look at the store and have knowledge of the brand."
However, he clarifies that DA + CO is due to the popular classes. “We are what we are today is thanks to the sales we made in popular areas. That is our audience, our target niche. Without the Catia and San Martín stores DA + CO would not exist ”, he highlighted.
-In the 80s there was a giant of household appliances called Imgeve, which since September began its financed sales strategies, aimed especially at people with low resources, have you thought about executing a similar one to reactivate the purchasing power of this niche of consumers?
-Yes, we have developed a financing plan and section system. We planned to launch the project last July, but it was delayed given global freight increases as a result of the covid-19 pandemic. The payment for maritime transport of the merchandise jumped from costing US $ 3.000 to US $ 18.500, which represents about a 500% increase, worldwide, not only in our country, which I think has already touched the top, the world market is very impacted by the pandemic and will not resist much longer than that - he commented. On the other hand, we have also had delays in the delivery times of the containers, before they arrived between 40 and 45 days and today they arrive between 60 to 90 days. A significant delay.
-Did the covid-19 severely affect the business?
Raw materials also increased considerably due to the decrease in production also caused by the issue of covid-19 that affected the production of industries around the world. Aluminum, copper and labor have risen significantly in prices, which at this time has led to global inflation. Adjusting that inflation to the product that we intend to sell "in parts" is impossible. If a customer sets aside a fridge for $ 600, I can't increase its price after a month because of inflation. This situation stopped us from launching the financing sales project. The structure is already developed and yes, it is very similar to what Imgeve had in the past, where the client can pay in parts.
However, Ibarah revealed that they are in talks with the private bank who will assume the loan through an insurer to guarantee the sale. “We are creating a financial system where DA + CO is going to give the product to the buyer under an initial one and the rest is the private bank who finances the product. And so you can take your product with you immediately ”.
-How is this delay in containers and increased freight and raw material going to impact the final consumer?
We are trying to make it affect as little as possible. In Venezuela, the increase in household appliances from January to today has increased by at least 40 to 50% given world inflation. Also, our profit margins have declined due to the considerable increase in competition, which in recent times has been much stronger.
At the price of a skinny chicken
After the so-called Dakazo in 2013, many appliance stores closed their stores. The shortage of these products was felt in a country that is characterized, according to the merchant, as having one of the most consumerist audiences in the region. Since the tariff release for imports, the recovery of this market has been noted with the development of new stores (including still lifes that offer from a bottle of Nutella to a SmartTV). “Some capitals left the country and others stayed, but many times it is easier to say that those who bet and are fighting to survive the crisis are 'plugged in', without stopping to think that there are companies that have been rooted in the Venezuelan market for years and that we are not interested in going out, ”says Ibarah.
-How do you achieve the expansion of DA + CO in the midst of the crisis?
-My dad built a financial capital for many years, since he started the business. It is obvious that Venezuela had many years of abundance, which do not compare with these last years of recession. We Arabs have a culture of saving, investment and capital generation, which is why we invested and decided to bet on the crisis. We therefore took the opportunity to acquire many commercial premises that were impossible to acquire in the era of economic abundance. As we say in Venezuelan, we take advantage of the prices of skinny chickens. For example, a transfer in Sambil could cost a million dollars. In the CCST it was impossible to get a place, even if you had the money. At this time, in a space within a shopping center, even in key, strategic points, we only pay the rent and the condominium, the transfer no longer exists.
- What was the criterion for betting on the crisis to continue investing in the country and not take the capital out?
-I am Venezuelan and I do not see myself investing abroad. As a merchant, I can tell you that Venezuelans are "sick" to consume. We are one of the most consuming countries in the world. Nowadays, not even 10% of the population is buying and when we take out a promotion we get queues in stores, we see full restaurants, people manage to consume, to spend. There is still a rotating economy in Venezuela even though the official minimum wage is at $ 3, but economists do not understand this phenomenon of the purchasing power of Venezuelans. Here we are 30 million but we consume like a country of 100 million, our way of consumption is not normal. The Venezuelan market is unique. What you do as a merchant in a year in Venezuela, you do in 10 years in another country in the world, there is no doubt about that. Entrepreneurs who are afraid to invest, those who migrated, know that like Venezuela there is none. Whoever governs governs, dollarize or not, regardless of the salary, the Venezuelan will continue to spend. That is not a secret to anyone.
True to the popular class
DA + CO will continue to grow, but always thinking about its target audience, the one that allowed it to grow, which is why it will soon open what will be the corporation's largest store in La California, aimed especially at the captive audience of Petare and its surrounding areas. and thus complement the attention of the consumers of the niche of the popular class that they cover with their 5 stores in the west of the city.
“We are a national capital, I am Venezuelan and everything we have we owe to this country. All the investment we have made today was acquired through the Catia and San Martín businesses. We want to retake that audience and that market. We continue to have a large investment in popular sectors, today we have 9 stores in the west of the city (5 in Catia, 3 in San Martín and one in El Paraíso). The upper middle class buys in other ways, they have international credit cards, they buy through Amazon, they bring it from door to door, even though they know that in the store it will be cheaper because it avoids freight, but that is a matter of purchasing culture. The middle class, lower middle class, simply go to the store and buy.
-What are the products that Venezuelans buy the most?
-Televisions and air conditioners. The highest turnover of these products occurs in the months of October, November and December.
Ibarah added that they will soon delve into the cell phone market, which is another of the best-selling products in the country. “For this we have to have a qualified staff. We currently have 350 direct jobs, including main warehouse, unloading, loading, stores, administrative.
Made in DA + CO
DA + CO owns a kitchen assembler. Ibarah explains that they import them from China, disassembled, but that some parts and components are manufactured here.
“Due to the pandemic, projects to assemble televisions and produce some of their components in the country were delayed. If we want to grow, we have to manufacture here in the country, we cannot live on imports forever. We have the possibilities to produce ”, he comments.
He assures that DA + CO guarantees the spare parts of its products because they are products adapted to the Venezuelan market- “They are the same ones that have come to the country in the last 20 years. We manufacture where the largest brands in the world manufacture. DA + CO air conditioners are manufactured where LG and Samsung do, the compressors in our refrigerators are the same as LG, our kitchens are manufactured the same as Condesa, Regina, Mabe. It is not a new product for the Venezuelan market. What we did an engineering study, we disassembled those products and we took those famous brands already in the Venezuelan market and we went with them and began to manufacture them in China. It is not a new product in the local market, although the brand is new, the components and parts are the same ingrained in the country for 20 years.
Ibarah assures that the guarantee is one of the strengths of the brand. “We provide support to the client portfolio with specialized technical repair service, we offer product warranties for up to one year, at no additional cost. After the year, the client has the free technical advice of the product, we can diagnose the failure, if it is the case.
-What are the marketing plans envisaged for the DA + CO brand?
We will hire some fences for this last quarter, which is the strongest of the year, the Black Friday in November, a sales strategy that has already taken root in the country. We are also fine-tuning alliances with influencers to boost the brand on social media. We also invest in radio.
The businessman commented that for now they are not interested in selling the brand as a franchise as an expansion strategy.
-How do the still lifes that bring home appliances without paying taxes impact?
- I believe that the authorities should regulate that because it severely affects the established trade rooted in the country. Not only because it affects household appliance distributors, but also national food production companies. Nowadays, imported products are obtained cheaper than national ones and that is seen in all areas. Still lifes sometimes even sell cheaper than supermarkets. In our niche, it is beginning to affect us because they put the products in their containers, and they end up paying door to door and we lose market, it is unfair competition and we hope that the State will take measures on that in the import regulations and put them to pay import duties on your goods as we do. The still lifes do not give guarantees of the electrical appliances because it is not their business. They are not exclusive distributors of brands like us.