Finance Services are Contributing Big Time in AC Sales: Goldy Electronics

• This Gurugram based consumer electronics showroom feels that ACs and TVs are best selling consumer electronics in the offline channel
• The showroom feels that India’s young generation is the driving force behind consumer electronics industry

Vijay Kumar, owner, Goldy Electronics, in an exclusive conversation with EFY Group’s Rajeev Kumar shed light on consumer electronics retail and India’s ACE (Appliances and consumer electronics) industry.

“In the retail business, the brands that you do not deal in always create challenges. But if you are ready to face the challenges, the solutions to them are not hard at all, ” shared Vijay Kumar.

Here are some more interesting excerpts from this conversation.

ACE- When did you start this business? What prompted you to start this business?

VK – We started this business with brands LG, Whirlpool and Bajaj. In the beginning, we dealt with consumer electronics products including TVs, refrigerators, washing machines, air conditioners, and home appliances products. Later we also included dealing in Haier, Samsung, and Philips products.

The main reason behind entering the consumer electronics business was the decline in audio products. We used to retail CDs, DVDs and cassettes, and as the business started declining we forayed into the consumer electronics category. Goldy Electronics was set up in 2009 was the best seller in consumer electronics vertical in Gurugram.

ACE- What’s your vision for your business and India’s ACE industry?

VK- Our vision is to establish Goldy Electronics as a trusted consumer electronics showroom. We aim to do this by serving the best standards of customer service at our store. Whether it is post-sales services like delivery and installation or pre-sales services like treating the consumer as a king, we want to ace them all. I believe that service is of the utmost importance when it comes to consumer electronic retails.

Earlier (Before 2000), When I as a consumer wanted to purchase consumer electronics products then I had to visit selected markets like Palika Bazaar and Gaffar market. Even then, the security of getting products of your choice was not there.

Now the scenario is completely different. Since India started focussing on electronics manufacturing, product availability is not a challenge anymore. Additionally, the overall prices have come down too. If we grow at this rate, then I am sure India will be counted among the top three nations in terms of consumer electronics manufacturing.

ACE – How do you see India’s ACE (Appliances and Consumer Electronics) industry growing from here?

VK- India’s ACE Industry is growing at a fast pace and its future seems to be bright because India has the largest population. We are also huge in terms of the consumption of electronics goods.

Another reason is the young population which is more tech-savvy. They keep upgrading their consumer electronics products according to technological advancements. These are the things that drive the consumer electronics business at the moment.

ACE – How’s your business doing in this FY? There’s a lot of news of growth from the ACE sector—are you witnessing it too, in your business?

VK – Yes, we are witnessing growth in air conditioner and LED TV business. I believe global warming is one of the biggest reasons for the growth of the air conditioner business. Rising temperatures are leading to a rise in AC sales as well.

The air conditioner is not anymore a product category for rich people only. Technological advancements in air conditioners have lead to these becoming more affordable. Now more consumers are buying air conditioners. I think finance facilities are the biggest contributor in the air conditioner business because the maximum transaction in AC business is done through finances.

ACE – Any new strategy implemented by your team in this FY that’s resulting in growth?

VK – We drive many different strategies at our store. A lot of times these are driven by the brands and at a time driven by us.

Last Diwali we offered freebies like watches, covers for washing machines, air conditioners, and refrigerators. These are examples of some of the promotions that we do regularly. In fact, we recently organized a lucky draw where we gave 55-inches TV to a customer.

ACE – Any product segments or brands that are affecting your business positively or negatively?

VK- There are challenges, but these are from brands that we do not deal in. However, giving good product demos help in beating these challenges. Yes, there are times when we lose customers because of specific brand preferences.

In the retail business, the brands that you do not deal with always create challenges. But if you are ready to face the challenges, the solutions to them are not hard at all.

It also depends on how you negotiate with brands at the time of purchase. If your product selection and price points are better than your competitive retailers then there are chances you can do better. Otherwise, you will lose sales due to your purchase strategy.

ACE – What’s your strategy for developing your team to guide and sell the right product to your customers?

VK- Most of the staff provided to us is from brands. These brands train them on a regular basis for new product launches or new product technology. This helps us as well. As I earlier mentioned product demos help us when we talk to the customer about the product which we are not dealing in.

ACE – How are you handling the challenges created by Online portals like Amazon and Flipkart?

VK- Yes, there used to be challenged from the online sales channel but after government policy changes, these challenges have been reduced. Actually, we now, at a lot of times, are able to offer products cheaper than the online channel!

ACE – What’s your strategy for products that get discontinued or obsolete? How do you avoid losses on them?

VK- Sales managers from brands visit us regularly. These managers tell us about possible launched and technology upgraded. Hence, we plan our purchase accordingly and incase any product gets stuck in our inventory then brands support us in liquidating these. Usually, new products come at a higher price than an old product that also helps us to liquidate our obsolete inventory.

ACE – Are you accepting digital payments from customers through Debit Cards, Credit Cards, PayTM, etc? Are you seeing an increase in the same?

VK- Yes, we are accepting digital payment. In fact, we are doing almost 90 per cent business through the digital payment modes. Offers from digital payment vendors and banks help us in converting sales.

ACE- What’s your take on the erosion of margins because of commissions on cards, payment gateways, etc on digital payments? How do you manage this challenge?

VK- Yes, it costs us around 1.5 to 2.0 percent but it is important to survive in today’s competition. You have to bear it.