For Croma, retail's all about sellingto women
Retailing electronics, considered synonymous with wafer-thin margins, can make for good business if one gets the store location right and adapts to consumer needs, Ajit Joshi, chief executive officer, Infiniti Retail, a wholly owned subsidiary of Tata Sons, which runs electronics chain Croma, told Shailaja Sharma. Excerpts from an interview:
Any learnings in the business of selling electronics?
When we first started one or two stores, Woolworths' inputs made a lot of difference. Subsequently, we had to modify to Indian needs because what happens in a typical western environment is a cookie-cutter approach. That means, when you move from one store to the second to third to fifth, the requirements don't change much. Whereas in India, when you move from Gujarat to Chennai to Delhi to Kolkata, you have to adapt accordingly. For example, in Gujarat, the dream machine for a housewife is to have an atta chakki, whereas it's an idli batter grinder machine for a housewife in Chennai. So, we have to stock those products in those cities. Similarly, come winter in Delhi and you have to sell heaters, but by summer you're selling loads of air-conditioners. And so, our requirements for the stores vary city to city.
What other changes have you had to make?
We planned our in-store fixture designing keeping in mind the Indian woman. We got a team of five architects to design them. If you look at the height of an average Indian woman, it is five feet — if she is five-and-a-half feet or above, she is considered a tall woman. Now, the fixtures that our overseas partner has brought were five-and-a-half feet tall. So we had the heights reduced. The simple logic was that we want women to go in every nook and corner of our store. There is nothing I'd want to hold back from being sold. Then we moved from wood to metal fixtures that make it easier to display our entire product range.
Why the emphasis on women?
Because a woman is the decision maker of her home, even when it comes to technology products, be it a laptop or a desktop. We are the largest sellers of laptops in the country and what we see is that the entire family comes when they have to buy a computer. When you're buying a television, the wife has to be there. Can any Indian husband buy a microwave and then tell his wife what he got? No way! We want the entire family to come to our stores.
You usually have exclusive tie-ups with manufacturers for launch of their products…
Yes, we do those. And the credit goes to my entire team as we are in a position to be the launch partners for most of the top brands, be it LG, Samsung or Sony. Then, in the technology area, if Apple is bringing something new, Croma has always been a partner. Now, when Apple iPhone 4S comes, we will be the retail partners for them. Currently, Samsung's Galaxy Tab is one of the hottest selling products in our stores.
You launched some products under your own private label...
They have met our expectations and we are absolutely on the right track with them. Last year, we did a turnover of `80 crore from these products. This year we should do `140-150 crore. Our overall turnover last year was `1,549 crore. We have been growing more than 50% year on year.
How strong are your same-store sales numbers?
Same-store sales, too, are growing in double-digit, which we think is sustainable. Today, people talk of recession. We've beaten it in 2008 and we intend to beat it this time around as well.
What changes for you with FDI in retail?
We have a strong relationship with Woolworths' for the last five years. We will, however, have to wait for the government's final policy on FDI to be out. From the consumer's point of view, if tomorrow the world's leading retailer in electronics comes to India, the prices will get rationalised and you will get much better products, better technology and on time, every time.
When will the company achieve breakeven?
The past three years, we have been operationally profitable. This year, we are looking at achieving breakeven, which very few retail companies have achieved.
Future Group has started selling electronics online in a big way. When will you?
We are in the process already. We will take baby steps there, start with a city or two, like Mumbai and Pune, and then spread across.
Retailing electronics, considered synonymous with wafer-thin margins, can make for good business if one gets the store location right and adapts to consumer needs, Ajit Joshi, chief executive officer, Infiniti Retail, a wholly owned subsidiary of Tata Sons, which runs electronics chain Croma, told Shailaja Sharma. Excerpts from an interview:
Any learnings in the business of selling electronics?
When we first started one or two stores, Woolworths' inputs made a lot of difference. Subsequently, we had to modify to Indian needs because what happens in a typical western environment is a cookie-cutter approach. That means, when you move from one store to the second to third to fifth, the requirements don't change much. Whereas in India, when you move from Gujarat to Chennai to Delhi to Kolkata, you have to adapt accordingly. For example, in Gujarat, the dream machine for a housewife is to have an atta chakki, whereas it's an idli batter grinder machine for a housewife in Chennai. So, we have to stock those products in those cities. Similarly, come winter in Delhi and you have to sell heaters, but by summer you're selling loads of air-conditioners. And so, our requirements for the stores vary city to city.
What other changes have you had to make?
We planned our in-store fixture designing keeping in mind the Indian woman. We got a team of five architects to design them. If you look at the height of an average Indian woman, it is five feet — if she is five-and-a-half feet or above, she is considered a tall woman. Now, the fixtures that our overseas partner has brought were five-and-a-half feet tall. So we had the heights reduced. The simple logic was that we want women to go in every nook and corner of our store. There is nothing I'd want to hold back from being sold. Then we moved from wood to metal fixtures that make it easier to display our entire product range.
Why the emphasis on women?
Because a woman is the decision maker of her home, even when it comes to technology products, be it a laptop or a desktop. We are the largest sellers of laptops in the country and what we see is that the entire family comes when they have to buy a computer. When you're buying a television, the wife has to be there. Can any Indian husband buy a microwave and then tell his wife what he got? No way! We want the entire family to come to our stores.
You usually have exclusive tie-ups with manufacturers for launch of their products…
Yes, we do those. And the credit goes to my entire team as we are in a position to be the launch partners for most of the top brands, be it LG, Samsung or Sony. Then, in the technology area, if Apple is bringing something new, Croma has always been a partner. Now, when Apple iPhone 4S comes, we will be the retail partners for them. Currently, Samsung's Galaxy Tab is one of the hottest selling products in our stores.
You launched some products under your own private label...
They have met our expectations and we are absolutely on the right track with them. Last year, we did a turnover of `80 crore from these products. This year we should do `140-150 crore. Our overall turnover last year was `1,549 crore. We have been growing more than 50% year on year.
How strong are your same-store sales numbers?
Same-store sales, too, are growing in double-digit, which we think is sustainable. Today, people talk of recession. We've beaten it in 2008 and we intend to beat it this time around as well.
What changes for you with FDI in retail?
We have a strong relationship with Woolworths' for the last five years. We will, however, have to wait for the government's final policy on FDI to be out. From the consumer's point of view, if tomorrow the world's leading retailer in electronics comes to India, the prices will get rationalised and you will get much better products, better technology and on time, every time.
When will the company achieve breakeven?
The past three years, we have been operationally profitable. This year, we are looking at achieving breakeven, which very few retail companies have achieved.
Future Group has started selling electronics online in a big way. When will you?
We are in the process already. We will take baby steps there, start with a city or two, like Mumbai and Pune, and then spread across.
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