From a mall in Dubai to presence in 22 countries: The Lulu story

Global retail conglomerate Lulu Group, a Dubai-based company with a massive presence in the UAE and Gulf countries, is all set to spread its wings in India. Started in 2000 by Thrissur-born MA Yusuff Ali, the company whose Indian presence was mostly limited to Kerala, recently struck a deal with the Tamil Nadu government to set up shop in the state at an investment of ₹3,500 crore.

As per the Memorandum of Understanding, signed in the presence of Chief Minister MK Stalin in Dubai, the company plans to set up two retail malls worth ₹2,500 crore and a food processing unit worth ₹1,000 crore. The company has already started the construction work for a hypermarket in Coimbatore.

The company, which started as a single mall in Dubai in 2000, is now a multinational conglomerate that has 57,000 employees working in 230 retail stores across 22 countries, and is raking in an annual turnover of $8 billion. The group has now forayed into shipping, information technology, travel and tourism, education apart from their core business such as trading, import and distribution, shopping malls and hypermarkets.

Yusuff Ali’s remarkable story of building a business empire in a foreign country also reflects the opportunities the Arabian soil has provided to Indian merchants over the centuries.

Indians and birth of retailing in Dubai

Experts say the economic development of the Gulf region was directly linked to the rise of the retailing business in the Arab states. Cities like Dubai, which played a major role in trade and commerce in the region, reflected the overall prosperity of the Gulf region.

According to Dr Fatima Al-Sayegh, associate professor of history and archaeology at the UAE University, Al Ain, Dubai’s port became the main entrepot in the Gulf, and the busiest trading port in the region towards the end of the 20th century.

“With little or no other means of livelihood, commerce became the main source of income for the Shaikhdom,” she writes in her paper ‘Merchants’ role in a changing society: The case of Dubai, 1900-90’.

She says that in many ways, Dubai typifies the way in which Gulf cities have developed over the past 200 years. “Many have grown rapidly from small merchant communities to thriving commercial centres. In fact, Dubai owes much of its prosperity and development to its merchants who played a key role in restructuring the economy and in the government decision-making process,” she writes.

“As the main contributors to the economy, they played a fundamental role in implementing economic and political reforms, and were the driving force behind Dubai’s development in the pre-oil era. When oil was struck in the mid-1930s and revenue began to pour into the state’s treasury, many predicted a decline in the influence of merchants whose revenues had shrunk, and who had consequently lost some of their power. A closer examination of Dubai’s development shows, however, that any decline in the merchants’ influence was only temporary. Even today they continue to play a fundamental role not only in economic affairs, but also in reformulating the political structure of Dubai,” Al-Sayegh writes.

Archaeological evidence also testifies that Dubai was a prominent stopover for traders from India, Persia, China and Eastern Africa while on their way to the West.

“Dubai’s merchant community has always been cosmopolitan. Indians and Persians have traded freely on equal terms with Arab residents for centuries… Hundreds of Indian British subjects, or banias, settled in Dubai after 1865. They represented British Indian firms in Bombay and formed a segment of the merchant class. Indians took to banking, since Muslims, bound by religious law, could not practice usury. It was therefore, the banias for the most part who financed the yearly pearling expeditions. In addition, the Indian merchants supplied the diving fleets with textiles and imported goods, taking pearls in payment for supplies. They also monopolized shop-keeping and retail trading activities; many became extremely rich. As a result, Indians comprised the second biggest economic class in Dubai,” writes Al-Sayegh.

Trade in the time of war

In the 1980s and 1990s, when wars broke out between Arab states over oil production capacity and price differences, several traders switched back to their previous roles of exporters and importers of goods.

“From the early 1980s until the mid-1990s Dubai’s commerce with the Gulf Cooperation Council and other Gulf countries such as Iraq and Iran grew and diversified. As far as Iran is concerned, Dubai enjoyed a brisk and lively trade with it during most of the 1980-1988 Iraqi-Iranian war. Dubai’s merchants revived their previous roles as major entreports of trade and created a new one as suppliers of services. Their dhows were playing back and forth to the Iranian coasts laden with a wide variety of consumer goods, foodstuffs and equipment of all kinds… Another lucrative business which witnessed growth during the war was servicing international shipping which found Dubai a safer place than Kuwait or Iranian ports. Dubai’s dry dock, one of the largest in the world, was busy maintaining and overhauling tankers as well as repairing those damaged in the fighting. Dubai was therefore loath to relinquish its neutrality in the war,” writes Al-Sayegh.

Rise of Yusuff Ali

The trend repeated in the Second Gulf War of 1991. While most of the merchants started packing their business and shifting to other countries due to the war, Yusuff Ali sensed an opportunity in the calamity. He opened the biggest supermarket in Abu Dhabi. That made the Arabs accept him as one among them.

But he didn’t start his first venture overnight. Born in 1955 at Nattika, a small village in Thrissur district of Kerala, Yusuff Ali Musliam Veettil Abdul Kader, flew to Dubai in 1973. There he supported his paternal uncle MK Abdullah in running a small grocery shop. He was primarily doing import and distribution of canned and frozen foodstuffs. His travels to countries like Hong Kong, Singapore and Australia gave him the idea of ‘supermarkets’.

To be precise, he was not only at the right place and right time, but was also doing the right thing. Following the large amount of oil production in the Gulf countries, there was a huge influx of people from third world countries like India, Pakistan, Bangladesh and Sri Lanka. To cater to their needs, primarily the food under one roof, Yusuff Ali launched the Lulu supermarket after taking a loan of 25,000 dirhams from the then British Bank of the Middle East.

A ‘pearl’ of an idea

He named his supermarket ‘Lulu’, meaning pearl. It should be noted that Dubai was once heavily dependent on the traditional pearl hunting industry, which was the backbone of its economy before oil and retailing business took over. What started as a supermarket, later turned into a hypermarket, and then into a shopping mall. Today it has a chain of retail malls across the world. In 2000, Lulu became a conglomerate and Yusuff Ali launched Lulu Group International. With that development, he came close to UAE president Al Nahyans. The rest is history.

To put in Al-Sayegh’s words, being a merchant, Yusuff Ali has a voice in the government too. Whether it is striking a peace pact between the Kerala government and Dubai based TECOM, a part of government-owned company, Dubai Holding, on developing a smart city near Kochi, or building the first crematorium for Hindus in Abu Dhabi or intervening with the UAE government to grant pardon to the Indians who stay in the country without valid visas, Yusuff Ali has been a powerful facilitator between both the countries.

ETA, the forgotten Empire

The success of Yusuff Ali and his business empire is also reminiscent of the Emirates Trading Agency or ETA Ascon – Star Group, also known as ETA Group, which once employed nearly 70,000 people in 23 countries.

Founded in 1973, the company initially focused on the construction industry and later moved into areas like aviation, hospitality and consumer electronics among others. The ETA Ascon-Star Group is a partnership firm of Al Ghurair Group, Dubai and a Tamil entrepreneur BS Abdur Rahman. The latter served as the vice-chairman of the group from 1973 to till his death in 2015.

Rahman was also the founder of East Coast Constructions and Industries which has built many iconic constructions like Anna Flyover (or Gemini Flyover), Kodambakkam Flyover, Chepauk Stadium, Valluvar Kottam and Marina Lighthouse. His period is considered as a ‘golden period’ by many of the former employees of ETA. It is said that Rahman used to say that ETA means ‘Engeyum Tamil Aatkal’ (Tamils everywhere).

On social media, many of the former employees of ETA remembered how their lives were changed for good in the 1970s, 1980s and 1990s since the company paid and cared for them well. They said that it was disheartening to know that ETA Ascon Group is no more now.

“If ETA Ascon was managed well at the top level after the period of Abdur Rahman, probably all the privileges enjoyed by Lulu Group now would have gone to ETA Group,” said a former employee.