- Brands, as per Isha Electrovision, have started following different strategies for online and offline channel
- The showroom is witnessing an increase in sales of large-screen TVs
Akhil Bansal (AB), owner, Isha Electrovision in an exclusive conversation with EFY Group’s Rajeev Kumar spoke about consumer electronics retail business in Gurugram, Haryana. He feels that the new e-commerce policy has helped offline channel compete against the online channel.
“To be frank, there are not many challenges from the online channel now. The brands have started following different strategies for different channels. Additionally, the new policy has also worked for us. The challenges arrive only when online channels try to drive sales through discounts,” shared Akhil Bansal.
Here are some more interesting excerpts from the conversation
ACE- What’s your vision for your business and India’s ACE industry?
AB – My vision for this business is to establish this business into a retail company. A company that caters to all segments of the society in Gurugram. We want to be able to retail affordable as well as premium consumer electronics and become one-stop-shop for the same in the city.
Manufacturing of consumer electronics, as well as the competition between brands, is increasing in India. As a result, the pricing of consumer electronics is decreasing day by day. Currently, we are selling more smart TVs than normal ones and more 43-inch units than 32-inch ones. The sales of TVs above 50-inch have increased as well.
ACE- How do you see India’s ACE industry growing from here?
AB- Overall growth of ACE Industry looks good. Consumers in India keep exploring products on the basis of their needs and technological advancements. It will not be wrong to say that smart TVs sell more than normal TVs now. As a matter of fact, consumers now want TVs to be a part of every room in their house, so these sell more than refrigerators and washing machines.
The consumer electronics market is getting matured in Tier I and Tier-II cities. Retailers here have started keeping complete product ranges on display. Doing this not only helps consumers decide but also helps retailers like me grow our business.
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?
Yes, we are witnessing growth in the TV business and AC business. I think the AC business has more scope in the country. The AC penetration in India is limited to eight per cent. This simply means that as ACs get affordable more and more people will opt for buying them.
Nowadays, TV business mostly depends on product display and visibility of the store. We now we have more 43-inch, 50-inch, 55-inch TVs on display than 32-inch ones. This strategy has worked for us and we are now selling more larger screen sized TVs than the smaller ones.
ACE – What are your expansion plans in the near future?
AB- We are opening one more showroom in few days in this market. We are also planning two more showrooms in the next two years. In order to survive in this business, it is very important to have own property and follow a multi showroom strategy.
The more number of stores means more consumer which is directly proportional to increased support from brands. Sellin a large number of consumer electronics means you can easily negotiate with brands. This also helps compete against the likes of Croma, Reliance Digital and other large-format stores.
ACE- Any product segments or brands that are affecting your business positively or negatively?
AB- There are not many challenges from any product or brand specifically. However, the challenges arise when a brand decides to sell a particular product through the online channel.
In such cases, we try to offer similar products to consumers. If the move clicks then its ok otherweise we do not do anything more. The second challenge is from the modern trade retailer. These can offer better discounts than most of us, We are trying to figure out ways to compete against them.
ACE- What’s your strategy for developing your team to guide and sell the right product to your customers?
AB- Team plays the most important role in competing against other stores and online channels in the consumer electronics domain. Most of the brands we retail at our showroom provide their own sales force. Some also help train employees that are on our payroll.
Our team has the skills to sell products to people who insist on buying from the online channel. People who walk in at our showroom and show prices that are available online usually end up buying from us. I do not put any restrictions on my team. We sit together and discuss challenges. Briefing about targets takes place every morning.
ACE- Do you indulge in B2B (institutional) sales also? If yes, how much of that is it, a percentage of your overall revenue?
AB – Yes we are doing B2B sales since 2017. However, B2B sales do not contribute more than 10 percent of our revenues. ACs account for most of the sales in the B2B segment. We get these B2B leads from e-commerce platforms like Just Dial.
ACE- How are you handling the challenges created by Online portals like Amazon and Flipkart?
AB- To be frank, there are not many challenges from the online channel now. The brands have started following different strategies for different channels. Additionally, the new policy has also worked for us. The challenges arrive only when online channels try to drive sales through discounts.
We try to suggest different products to consumers to convert walk-ins into sales. We also pitch for card payments as discount schemes on credit and debit cards are avilable most of the time.
ACE- What’s your strategy for products that get discontinued or obsolete? How do you avoid losses on them? Any strategies introduced in the last year to counter the same?
AB- It’s evident that brands change their products line-up every year. In case of smartphones, the practice is actually more frequent.
Brands, now have started offering support on product line-ups that get old. Offers are announced to liquidate the outgoing stock by companies themselves. When we are left with outdated products, we also try to sell them by reducing margins on our own.
ACE- Are you accepting digital payments from customers through Debit Cards, Credit Cards, PayTM, etc? Are you seeing an increase in the same?
AB- Yes, we accept digital payments at our store. Digital payments help in the business as consumers, at many times, upscale their budgets and opt for EMIs on credit cards. For example, a consumer who is interested in buying a 32-inch TV upscales to a 43-inch one because he pays the amount through EMIs on credit cards. Direct finance like Bajaj and HDB finances are also helping customers to make decisions in upscaling purchases.
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?
AB- Yes, it costs us around 1.5 per cent but it is important to survive in today’s competition. We also offer digital payments like UPI Payments or payments through BHIM App.