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Croma focuses on private labels for better margins

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Infiniti Retail, a wholly-owned subsidiary of Tata Sons, is focusing more on private label products to garner better margins in electronics and consumer durables retailing.

The company will have 50 more products to its private label portfolio as it adds 22 new stores to its large-format, multi-brand retail chain Croma this year.

“At present, we have 48 different products from personal care equipment to laptops and consumer durables and this bouquet will have around 100 products by Diwali,” said Ajit Joshi, MD & CEO of Infiniti Retail.

In 18 to 24 months, Croma stores expect 20 per cent of its revenue to come from private label products.

“On an average, a consumer can expect a 10 to 12 per cent cheaper price for a private label product compared with the same quality branded product. We also provide our warranty scheme to the products. As for the company, private label products obviously promise better margins,” he said. Croma procures its products through its sourcing partner Australia-based Woolsworth.

In addition, Croma has adopted a strategy to grow in cities it has a presence before expanding its footprint across the country.

“We are not getting into tier-II and III cities now. All the new stores coming up this year will be in the existing markets, other than one in Rajkot. Understanding the local requirement itself takes four to five months. Apart from product retailing, we also provide after-sales service. We need to have 10 to 12 stores in a city to secure a dominant position in the market,” said Joshi.

In Chennai, Infiniti has opened two stores and the city will have seven or eight more stores. The new stores will be a mix of Croma, as well as technology product retail brand Croma Zip.

The Rs 657 crore company will spend over Rs 50 crore for the new stores this year. “Next year, we will enter Kolkata and with that we will be present in all the metro cities,” he said.

Source: Financial Chronicle

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