TO BEAT SLOWDOWN

With slowdown impacting sales of durables in the metros, Digiworld, owned by the Videocon Group, plans to shift focus to tier 2 and tier 3 cities and expects the bulk of its sales to be skewed towards smaller markets in the future.

Jaideep Rathore, Chief Operating Officer, Digiworld, Value Industries (a Videocon Group company), said, “There is slowdown in demand in the metros as consumers tend to postpone purchase decisions. On the other hand, we find first-time buyers for categories such as LED TV sets in the tier 2 and tier 3 cities. We expect 70 per cent of our turnover to come from smaller non-metro markets.”

The company is also targeting rural markets with population between 50,000 and 1 lakh and expects another 25 per cent of its sales to be absorbed in these markets, once it reaches the 1,000-store mark.

Competition

Intense competition among organised retailers in the urban space has also forced the company to change its priorities. “There are no Croma or Reliance Digital stores in places such as Rohtak, Ambala, Jabalpur or Udaipur. In the next five years, a chunk of our expansion will be in the tier 2 and 3 cities and the rural markets,” added Rathore.

The company has also has introduced a smaller format under DW Mobile stores, spread across 500-800 sq ft, for its IT products. DW Mobile currently has 48 outlets, and is expected to serve as the next growth engine for the retailer. “Telecom and IT are the fastest growing categories and have lower inventory and space requirements. We intend having 500 dedicated DW Mobile stores by next year. Currently, DW Mobile contributes 45 per cent to our turnover,” he said.

Digiworld was launched three years ago as a retail store dedicated to the Videocon group brands such as Sansui, Kelvinator and Electrolux. By 2011, it became a multi-brand format, but Videocon-owned brands continue to dominate it, comprising 60 per cent of the store inventory. The reverse applies for its smaller format stores under DW Mobile, where other brands constitute 95 per cent of the offerings.

festival season

Commenting on the festival season, Rathore said, “While mobiles and laptops are fast moving items, even LED TVs are expected to do well during the festival season. This year, we expect the company to reach a sales turnover of Rs 2,000 crore.”

purvita@thehindu.co.in

(This article was published on October 22, 2013)
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