The growth of organized retailing in India is creating new opportunities for manufacturers of appliances and consumer durables. With big chains like Reliance having firmed up their plans to launch retail outlets across the country, others are following suit. And interestingly, the retail chains are targeting different consumer niches.
For instance, Vishal Retail Ltd. announced plans to sell low-priced private-label appliances. According to the company, these private-label appliance brands will be priced almost half those of the well-known appliance brands. Retailers earn high margins from private-label brands and this strategy could be instrumental in increasing the penetration of washing machines, refrigerators, and air-conditioners in smaller towns in the country.
Another retail chain with aggressive growth plans is Tata Group’s Infiniti Retail. The group is investing nearly Rs 4 billion to set up a chain of 100 stores by the year 2010. Nearly 30 of these stores are expected to open their doors by the end of 2008. Recently, the group launched its Croma brand of electronics stores in southern India. Croma has targeted the key cities in southern India, including Hyderabad, Chennai, Bangalore, and Kochi. Over the next couple of months, Croma will have 10–12 large-format stores, with each store occupying retail space of 10,000–17,000 sq ft. These stores will stock high-end consumer durables and information technology products.
The Videocon Group also has ambitious targets for the expansion of its retail business. The group is a big name in the manufacture of electronics products and appliances and has already made acquisitions in the retail domain through its division Next Retail India. After buying up brands in the domains of music and entertainment retail (Planet M), it is looking at acquiring retail chains that sell cellular phones and other IT-related equipment and accessories, and spreading its reach into the smaller towns. Consumer durables and appliances form a major part of Next’s product range and the number of Next stores has already risen to 300 in 17 states in the country.