In 2012 Kenyan entrepreneur Arvin Gurjar was contemplating closing down his business and going back to formal employment. Gurjar had debts of nearly Ksh. 3m (US$34,126) and a business that was fast going under. His company, Deluxe Fruits, imported small volumes of fruits and vegetables from South Africa and distributed to wholesalers in Kenya.[hidepost=9][/hidepost]
Due to the perishable nature of his products, Gurjar often found himself making losses. Any error in ordering, storing, handling or distributing products left him with a “big bunch of rotten produce”.
“I encountered many problems and made losses such that by 2012 the company nearly collapsed. Yes, I learnt quite a lot but I was overwhelmed and just wanted go back to employment. I felt the prediction that companies die in their infancy was about to come true,” he explains.
However, Gurjar’s parents would hear none of his plans to quit and urged him to work harder, convince his creditors to be patient, learn from his mistakes and “give it a last shot”.
Gurjar borrowed Ksh.1m ($11,377) from his sister to revive the business.
“The reason the business almost collapsed boiled down to quality, pricing and variety. I had to change strategy, and diversified 50% of the business into exports to France. I started by sending one to two tonnes a week to a company that was willing to work with businesses run by young Africans,” explains Gurjar.
He also started focusing on importing fruit that consumers really wanted as opposed to just buying a variety of produce and hoping it would sell.
These corrective measures meant that by the end of the year Gurjar had fully repaid all his debts and expanded the company.
“Horticulture is a very lucrative industry. You can really make good money whether you are a farmer or a distributor. However, you have to do it right,” he says.
Venturing into e-commerce
Last year Gurjar diversified his business further by venturing into retail. The Deluxe Fruits owner noticed a gap in the sale of fruit in Nairobi. The only options customers had were to buy at roadside markets where access is a challenge and hygiene questionable, or at formal supermarkets where the prices are inflated.
“I am not just ambitious, I am very aggressive. If I can do something now I will do it now, not wait for later. I realised that if I went directly to consumers and eliminated the people in the middle of the chain I would be able to sell at a better price, sell better quality produce and offer consumers convenience through free deliveries. I knew this was something consumers would embrace and so far the market has been fantastic,” says Gurjar.
Through the Deluxe Fruits website, customers can now order fruit worth a minimum of Ksh.350 ($4), delivered free of charge.
The company operates four distribution points along major highways leading to various parts of Nairobi from where it delivers its fruit. Each outlet has two motorcycle riders who deliver to clients in their proximity.
Mistakes and lessons
Looking back Gurjar says one of the mistakes he made in business was not taking the time to do proper research and planning.
“I was like a daredevil. I went all guns out and that was a big mistake,” says Gurjar. “I have learned to keep my friends close and my creditors closer. If you shy away or hide from your creditors you will only make matters worse. When you are in business you can’t operate like a one-man show. You have so many stakeholders who contribute to your success. It is good to give time and space to these people because they will help you get to your success destination.”
His next plan is to get into farming and expand the export side of the business.
“We are only exporting to France at the moment yet Europe has 30 countries. For us to be able to serve such a big market it would be best to do our own farming and marketing.”