Converted concept for Cash Converters?
Kipp speaks to Fabrice Le Boulenger on how Cash Converters can experience success in Dubai as it has in the UK and Australia
August 21, 2012 1:44 by M. Aldalou
Dubai is quite often looked upon as the perfect formality for franchise expansion because despite the city’s considerably small population of just over 2 million residents, multinational companies and brands jump at the chance of opening regional offices in the Middle Eastern city. The opportunity to prove presence among other prestigious brands in this tourism and shopping hub of a city, is to many, an opportunity that can’t be missed. But, can the revenue earned from such a small targeted demographic compare to the hundreds of branches in different parts of the world?
Due to the endless array of perceptional differences in opinions and taste, the city is also seen as a perfectly designed platform for trial and error. Considering the hundreds of nationalities that reside here and the hundreds more that visit every year, a company could quickly discover whether its brand has international appeal or not. While luxury hotels, novelty items, fine dining and tall buildings have been well received by the population; a less than flashy concept might just make a cultural dent.
Cash Converters is an extremely popular and successful chain of shops that specializes in the buying and selling of used items. It originated in Australia in 1984 and now has 600 stores across 21 countries, gaining its popularity through providing sellers with quick cash and buyers with cheaper products. The branches have proven to be extremely popular in Australia (with 130 outlets) and the United Kingdom (over 170 stores) but how popular would it be in a city like Dubai?
How it hopes to work
“We are trying to offer an alternative to the expatriates coming in and out of Dubai,” says Fabrice Le Boulenger, partner at Cash Converters Dubai. “It is not a new idea here but having the physical showroom in a highly populated area is a strong alternative and we are going through the trial of it all now.”
Judging by the popularity of websites like Dubizzle, it is clear that there is a strong demand for buying and selling used or unwanted items in Dubai. Providing an alternative (physical store) could very well prove to be successful because having the ability to buy or sell through a store is a new concept in the city. A concept that allows the general public to be both the customers and the suppliers.
“The original concept of Cash Converters in other countries has worked well but it wouldn’t work perfectly here so we are adapting it while keeping the core purpose. There is a huge expatriate population here and no official unemployment so there is a lot less demand for ‘quick cash’ compared to other countries, which is usually the main motivator. But, in Dubai we can take a bigger risk and change the concept slightly.”
“We have added the buying and selling of furniture as well as the option for us to sell items on the behalf of the seller. Normally the concept doesn’t include furniture and includes buying an item at our own risk.”
For those moving out of Dubai, into a new apartment or merely looking to unload some of the unwanted weight of their shoulders, Cash Converters could prove to be a strong alternative for them to make a quick buck. However, where other international branches have benefited immensely from a strong culture of the ‘walk-in customer’, Dubai will fall short in that department.
Barriers and Expansion
The lack of walking in Dubai, attributed to the positioning of its infrastructure, the hot weather and the vast availability of cars and public transportation, can prove to be a tough barrier to break. However, Le Boulenger is more than hopeful that with proper visibility and easy car access, it would soon become a popular destination for buyers and sellers. “Having our showroom on Sheikh Zayed Road will be the key to our success,” he says.
Dubai is the stepping stone and a GCC expansion strategy is currently in the blueprint mode.
“We must first properly define the business model here. Right now we are established in Dubai and we do have hopes of expanding to the GCC but before we can do that, we need to have it properly defined. So give us at least a few more months,” he chuckled.
Is it an international rule for sellers to be 18 years old or above or is it just strictly for Dubai?
No, it is an international rule to secure that each seller is responsible for what he is selling.
Dubai is full of wealthy individuals and high earners, so who exactly is your target audience?
We believe that we can target all communities and class levels as long as we have good selling prices. Everybody likes a good deal, including high earners.
Any more business model changes in the near future to adapt to Dubai?
No, nothing else planned as of now.