- Many offline consumer electronics retailers in Delhi NCR favor retailing ‘local brands’ during Diwali
- Consumer electronics with ticket sizes in the range of Rs 1,200 to Rs 1,500 sale the most
While almost every consumer electronics brand focuses on selling B2C during the festive season in India, B2B sales form one aspect that cannot be neglected. Areas like Delhi, Gurugram and Noida, which also form Delhi NCR (National Capital Region of India) house several small and big businesses. Offices with employees ranging from 10 to 50 individuals are also in plenty here. As a matter of fact, a lot of these offices prefer gifting small consumer electronics to its employees.
Manjeet Singh (MS), owner, Bhagwati Electronics & Telecommunications, Gurugram, told EFY that while B2B consumer electronics sales do not usually take place the entire year, these pick up and contribute as much as 10 per cent to their festive sales revenues during the Diwali season. He said, “B2B consumer electronics sales are default during Diwali in North India.”
Small consumer electronics that lead the sales
Small consumer electronics that sale the most around Diwali include power banks, electric kettles, sandwich makers, juicer mixers, coffee makers, hair dryers and trimmers. While all these products fall under different categories, these mostly are covered in the same price category. Small business owners, as per majority of retailers we spoke to, prefer buying small consumer electronics in bulk for gifting purposes. The ticket size for an individual product averages in the Rs 1,400 to Rs 1,700 range, whereas when bought in bulk, the same ticket price amounts in the Rs 1,200 to Rs 1,500 range.
Rajan Singh, owner, Tushar Telecommnucations and Consumer Electronics pointed towards power banks, sandwich makers and electric kettles as the best selling consumer electronic categories during B2B sales. He also mentioned that the prices of portable speakers, power banks and electric kettles allows business owners to gift meaningful diwali gifts to their employees.
He said, “The prices of a good quality 10000 mAh power bank does not exceed Rs 1,300. If a business owner has approached us for buying these in bulk we are able to negotiate and offer the same in less prices owing to the number of items he is looking for. The average ticket size for a business owner in this area is around Rs 23,000 on Diwali.” Interestingly, his showroom is located in the Industrial Town of Faridabad, which is also a part of the Delhi NCR region.
An opportunity for consumer electronics brands?
While The consumer electronics market in India is flooded with a lot of the above mentioned products offered by Chinese players, the ones retailing such products with warranty and guarantee terms are still missing. Many consumer electronics retailers prefer to sell products from these not so popular brands as the margins involved are comparatively higher.
A retail showroom owner located in Delhi said, “Diwali accounts for 25 to 35 per cent of total sales we make in the year. This is a time when we earn revenues that support us during the entire year and selling these small ticket size consumer electronics helps us make good profits. We cannot compete against big e-commerce channels but in order to survive we have no choice but to retail these. While companies like Mi have made it some what easy for us, the margins compared are still not that good.”
On being questioned about the kinds of margins consumer electronics brands offer to their sales channel during the festive season in India he replied,”The margins are good but they are not as good as e-commerce channels. We cannot sell as many power banks, trimmers or electric kettles as them.”
The next question that followed was “Are e-commerce channels eating share in B2B sales as well?” The answer he gave was quite clear. He said, “During Diwali the number of such items one can order is limited and most of the small business owners do not want to make multiple orders. A lot of these people prefer showrooms like us because there is no fuss involved and we offer Diwali buying on credit too.”
Creating an opportunity the ‘local brands’ way
A good opportunity that consumer electronics brands can create here is creating a special sales channels for these small ticket size consumer electronics around Diwali. A lot of retailers are keen on selling branded consumer electronics in bulk but they are never sure of the quantity they need to order, and some do not have faith in the kind of margins offered. Ordering too much means unnecessary stocking of small electrical durables that sell most around Diwali and ordering too little usually results in sales going to other nearby retailers.
The smaller, not so known consumer electronics brands, as per retailers, offer solutions to such problems on a real-time basis. Retailers told us that teams from these brands are available 24X7 during Diwali. Whether they order less or more, these brands are always ready to compensate and always on heels to deliver products at the earliest. While a lot of these consumer electricals are imported from China, these not so well known brands are still famous by the name of ‘local brands’ in such areas.
“Offline B2B Diwali sales are about the swiftness and service you provide. Small business owners walking into our shop are here to make last minute purchases. They do not wish to waste time and money. Either you have the products ready or the opportunity goes to the neighbouring consumer electronics showroom, ” said a Noida based consumer electronics retailer.
He added, “While big brands cooperate with us for the majority of the year, it is these ‘local brands’ that cooperate more during Diwali. You do not want to lose a business opportunity involving 45 electric kettles or sandwich makers just because a particular brand cannot deliver those in time.”