- Samrat Electronics feels that a strong service network helps retailers develop trust in consumers
- The consumer electronics showroom’s owner said that Netflix and Amazon are driving smart TV sales in India
He said, “Manufacturing of consumer electronics has started at a very good pace in India. This definitely is a good sign for India’s ACE industry. However, there are still brands in India that do not manufacture here. These are able to offer products at low costs but in the end, their service and parts availability are next to zero.”
Here are some more interesting excerpts from the conversation
ACE- When did you start this business? What prompted you to start this business?
MG – We started this business in October 1997 in a small shop. We were initially dealing in consumer electronics from limited brands. Today our business has expanded to six consumer electronics showrooms and three warehouses. Now we retail more than 50 product categories and more than 20 consumer electronics brands in Gurugram, India.
The consumer electronics market was an evolving market in 1997. Owning products like a refrigerator, washing machine or a TV was a special feeling. The demand of these products was increasing beyond Tier one cities. Watching Ramayana and Mahabharat on color TV was a big craze in those days and it was one of the factors that were driving the sales of TVs in Gurgaon. We wanted to tap this opportunity and hence forayed into consumer electronics retail business.
ACE- What’s your vision for your business and India’s ACE industry?
MG – My vision is to establish a consumer electronics retail company that can offer products at prices better than the online channel. The online channel has eaten a lot of our share from the market and I want to make sure that the offline channel return to its full glory.
Manufacturing of consumer electronics has started at a very good pace in India. This definitely is a good sign for India’s ACE industry. However, there are still brands in India that do not want to manufacture here. These are able to offer products at low costs but in the end, their service and parts availability are next to zero.
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? Any new strategy implemented by your team in this FY that’s resulting in growth?
MG – While we are witnessing growth in the business, it is not as much as we had anticipated. I think the online channel is giving us major competition.
We have deployed a strategy that we think will help us in the long term plans. Samrat Electronics is now reaching out to its existing customer base through SMS and calls. We inform them about new product launches and wish them on special occasions.
ACE- Any product segments or brands that are affecting your business positively or negatively?
MG- We prefer to do business with brands that have a good service network. Though there are a lot of brands offering higher margins, their service and part availability is below par at times. This dents our relationship with consumers. Once a consumer gets a bad taste of our showroom, he, will most likely not return to make any more purchases from us.
Yes, the online sales channel is one of the major challenges in the consumer electronics retail business now. A lot of online channels have brilliant marketing teams. They spend millions on marketing. As a result, they have successfully created an image in the minds of consumers that only online channels can offer the best prices.
However, that is not true. Consumers should also take installation time into consideration. One USP that the offline channel has is a good hold over the service network. We talk to brands, on behalf of a customer, regarding service of a product while the online channel still lacks that.
ACE- What’s your strategy for developing your team?
MG – I always treat my team members as my family. We know that the team plays an important role in making any business successful. A lot of our team members have been working here for the last 15 years. We simply follow one formula – you take care of the team members and the team members take care of the business!
ACE – How are you handling the challenges created by online portals like Amazon and Flipkart?
MG – We face major challenges from e-commerce players in India. Samrat Electronics tries to overcome these by offering better services, instant delivery, and quick installation. There are times when we do not even hesitate in compromising on margins to make sure that we give consumers a reason to visit us back in the future.
ACE – What’s your strategy for products that get discontinued or obsolete? How do you avoid losses on them?
MG – Today, the technology that comes embedded in consumer electronics, keeps evolving at a very fast pace. Brands change their product line ups yearly and on a seasonal basis. We order products after careful planning.
We try to liquidate outgoing models through sales when any inventory gets stuck with us. We also liquidate such models by reducing our margins. Sales and seasonal offers also help in these sales.
ACE – Do you indulge in B2B (institutional) sales also? If yes, how much of that is it, a percentage of your overall revenue?
MG- Yes, We do B2B sales and its contribution to our business is around 20 percent. However, we are not focusing on B2B sales. We get these leads through platforms like India Mart and Just dial.
ACE- Are you accepting digital payments from customers through Debit Cards, Credit Cards, PayTM, etc? Are you seeing an increase in the same? Do you have a finance facility? Do you have finance facilities for consumers?
MG – We are accepting almost all types of digital payments. In fact, digital payments are increasing at our shop. We have around 70 to 80 percent ratio when it comes to digital to cash payments.
However, in case if we have already given an extra discount then we try to focus on cash payments. Margins are very limited these days and we do not want to lose an extra percent or two by going with digital payments.