Croma sees big growth for its private brands in three years

Nandana JamesMumbai, October 26 Mumbai | Updated on October 26, 2018

Lower pricing,young users drive sales of aspirational products

Electronics and home appliances retailer Croma has seen a 300 per cent growth for its private label portfolio over the last three years even as its total revenue as a retailer has been growing at around 20 per cent.

According to Ritesh Ghosal, Chief Marketing Officer at Croma-Infiniti Retail Ltd, the demand for private labels is from the younger segment who are below 30 years, kick-starting their careers, and buying for the short term in the hope of upgrading to “something bigger and better”. The demand also stems from the feature-seeking customer “who again turns out to be the younger guy”, he added.

Croma has private label products in AC, refrigerator, television, washing machine, and microwave, full range of kitchen appliances, and products like earphones, headphones and bluetooth speakers.

Primary focus

“Our primary focus is to stay abreast of all the technology developments in every sector, and offer it to the customer at a good price. A growing set of people wants the same features and the same benefits, but at a lower price. This is where we serve through the line-up of Croma’s own products,” said Ghosal.

For example, Croma’s 32-inch full HD TV is priced at around ₹13,900. A branded TV with similar features is priced at around ₹25,000.

Ghosal said that Croma works with factories in India, China, Thailand, Turkey and other places, and ensures that its partners follow the same certification principles, and practices that a brand with 100 years of manufacturing experience would.

By Ghosal’s understanding, consumers can be segregated into three sections: The first category would have a firm conviction of the brand and the model it wants.

The second category of customers are those who are focussed on features, rather than a particular brand. The third category constitutes people who walk into a store and seek help, without any expectations on features or brands. Ghosal said that while the first category has no role at all for a private label, the second and third categories would be where the private labels have a role to play, along with tier-2 brands.

With the third category, the “retailer has a lot control”, he pointed out, adding that balancing the feature expectations and the wallet size is what private labels focus on.

“Between technological obsolescence and people’s shortening expectations of the lifespan of a product, and the belief of “I will want something bigger and better pretty soon” are the reasons why people buy the latest specs, but not necessarily pay the price that a Sony or an Apple expects them to pay,” he explained.

Published on October 26, 2018

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