Durables retailers spread wings

With big players, such as Tatas, foraying into durables retailing and established chains attempting to spruce up their act, consumer durables retailing is undergoing a change in the country.

The durables retailers, on an expansion spree, are all set to offer bigger retail spaces, better product offerings and above all a 'different shopping experience' to the domestic consumers.

Sumaria Appliances, a Mumbai-based durables retailer, is now eyeing Pune and Nashik for expansion.

On the other hand, the south-based retail chain, Digital Shoppy, recently concluded a private equity fund arrangement of Rs 17.5 crore (Rs 175 million) with Leverage India Fund managed by IL&FS. Digital Shoppy, which operates 22 outlets in Andhra Pradesh and Karnataka, is planning for a wider reach by entering the northern and the western markets.

A Mahesh Raju, chairman and managing partner, Digital Shoppy, said, "We are not deterred by the emerging competition. We have an expansion plan in place, where the company is looking at pan-India presence, and are also widening the product range by entering new categories."

Nilesh Gupta, managing partner of the Mumbai-based Vijay Sales said, "Though multinationals are entering the durables retailing, they will have to understand and adapt to the local market conditions. If not the same, we will also provide similar product offerings and a better shopping experience to customers."

The retailers are also focusing on other softer business skills, such as discount schemes, trained sales staff and personalised services, to draw customers.

For instance, Croma, the durables retailing initiative of the Tata group, had organised a workshop by actor Sachin Khedekar to train the sales staff in inter-personal skills.

Nihal Shah, director, Sumaria Appliances, said, "It is observed that customers have to contact several stores for product enquiries or other services.

The company has invested about Rs 1 crore (Rs 10 million) in software for setting up a call centre, which will be a one-stop point for all customer queries. The 20-seater centre is expected to be launched early next year.

Meanwhile, Vijay Sales has its thrust on discount offers that are well accepted by customers. "The discount schemes help in boosting sales and attracting customers. The one-day offers were very well received. It depends upon the right offer at the right time," said Nilesh Gupta.

Explaining the rationale behind entering durables retail, Ajit Joshi, CEO, Infinity Retail, said, "In 2005, a survey conducted by Tata Strategic Management Group revealed that the penetration of consumer durables was relatively lower than that of other categories.

"Among the 27.2 million households, which were surveyed, apart from televisions (42 per cent), the rest of the products had a lower penetration. There were major retail players in other categories, such as food and clothing.

"But, the durables retail was largely confined to local players with the absence of a national player. This was a good growth opportunity."

While commenting on the bigger players entering the market, Gupta concluded, "We have already created a benchmark in the sector. New players will help the market grow and there is enough space to accommodate multiple players at least for 3 to 5 years."

In an attempt to capture the growing market demands, the durables retailers are expanding in other regions and fanning out in smaller towns.