Consumer durable retailers are taking a second shot at e-commerce, the advent of which, they say, is being hastened by increasing internet penetration and growing comfort levels among consumers to shop online.
Mumbai-based Vijay Sales and Chennai-based Viveks are among those kickstarting e-commerce operations this year. While Vijay Sales is planning to take the plunge in 6 to 8 months, Viveks is expected to soon start selling goods online.
“In the next 3 to 4 years, e-commerce will be big in electronic goods,” said Nilesh Gupta, managing partner, Vijay Sales, a multi-brand retailer which started as a small television store in Mahim, Mumbai, in 1967. It has come a long way since and clocked a turnover of Rs 1,250 crore last fiscal. Vijay Sales has rapidly expanded its presence outside the city to Delhi, Pune, Surat and Ahmedabad. It has 17 stores outside Mumbai, but 65 per cent of its sales come from Mumbai where it has 22 stores.
Vijay Sales feels there is potential to garner 10-15 per cent of total sales through e-commerce in the next few years. Growing at 10 per cent annually, the retailer has projected a turnover of Rs 1,750 crore this fiscal.
“Trust will play a critical role in e-commerce as consumers warm up to this mode of making purchases. This will be the driving factor,” said Gupta.
For the South-based retailer, Viveks, e-commerce is a business one can no longer afford to ignore. “But you need to have an excellent supply chain in place that can not just deliver, but also service products. Else, such a venture will simply fall flat,” said B A Kondandarama Setty, CMD chairman and managing director of Viveks. To begin with, Setty is currently planning a South-centric portal. “We have a strong presence in South, so it makes logical sense for us to start here first.”
Going by the e-commerce plans being firmed up by retailers , one would assume that electronic goods and consumer durable makers would logically follow suit. However, most companies feel these may be early days. LG Electronics India said it was a bit early to talk of e-commerce. “Until the entire payment structure is set up, it is slightly difficult for e-commerce to take off,” said Y V Verma, COO, LG Electronics India.
“If e-commerce picks up, there’s nothing like it. But, even while consumers are becoming net-savvy, they are still hesitant to purchase on the net,” said George Menezes, COO, Godrej Appliances.
Premier, a Chennai-based brand that manufactures appliances and cookware, however, is keen on going the e-way in about three months. “To avoid e-commerce today is foolish as it is the market of the present and definitely, the future,” said S Sivanesan, CEO of Sivanesan Group which owns the Premier brand. Like Viveks, Premier too will initially restrict its online sales to the South. in the initial phase. “We may look at a national roll-out in the next two years,” said Sivanesan.
Although mobile phone and laptop sales are picking up online, industry experts doubt are skeptical as to
whether consumer durable sales would be as robust. “Internet comfort among women, who are the key decision makers for consumer durables, is still low. They still prefer a live demo and a touch-and-feel experience,” said an industry expert. However, items like LCDLED TV sets and DVD players are likely to do well.
Driven by a rise in disposable income, the Rs 35,000 crore consumer durable industry is expecting to clock 15 per cent growth this year.
Source : Times of India