- Gurugram based Ganpati Electronics feels LG and Samsung are the biggest competitors in India
- This LG brand shop said that consumers opting for digital payments and EMI facilities are increasing day by day
Ganpati Electronics, told Rajeev Kumar of EFY Group that it was the first to open LG’s brand shop in any mall in India. In an exclusive chat, Pradeep Taneja (PT), owner of retail company Ganpati Electronics, shared his company’s sales strategy, info on fastest selling consumer items in Gurugram, India. He also shed light on challenges brick and mortar stores are facing from e-commerce portals.
He said, “There is a huge scope in India’s ACE (appliances and consumer electronics) industry and the future is bright. Thanks to India’s high population density, the ACE industry will definitely grow. Basically, the growth starts from the Tier 1 city and then moves to tier 2 and tier 3 cities.”
More interesting excerpts follow –
ACE – When did you start this business? What prompted you to start this business?
PT – We started this consumer electronics business in November 2003 by opening an exclusive LG brand store in Sahara mall, Gurugram. At that time it was India’s first brand shop in any shopping mall.
LG Electronics was doing good in the TV business. The ratio of TV to home appliances sales back then was 80:20. But within a period of three months, we were able to turn around that ratio to 25:75. This benefited our home appliances business and it began to do very well.
The strategy that worked for us involved setting up a wider product display. Everyone who works with Ganpati Electronics has good product knowledge and hence gives out good product demo leading to better customer services. In June 2009, we opened one more LG brand store at Plaza Mall in Gurugram.
Before entering the consumer electronics business, I was in the automobile industry which is currently being looked after by my elder son. Currently, our company is running three businesses, one of which is in the consumer electronics sector and we hope to run this perfectly and do better than before.
ACE – How do you see India’s ACE (Appliances and Consumer Electronics) industry growing from here?
PT – There is a huge scope in India’s ACE industry and the future is bright. Thanks to India’s high population density, this industry is bound to grow. Basically, the growth starts from Tier 1 city and then moves to Tier 2, Tier 3 cities and beyond.
The chances of a lower middle class individual in a tier 1 or tier 2 city owing at least two electronic products – say a refrigerator and television – are quite high. On the other hand, a lot of people in the rural areas are still to get a taste of consumer electronics. It simply means that our country still has a lot of first-time buyers of consumer electronics.
Then comes technology up-gradation. People in cities are now moving to smart TVs. Only a few ask for normal TVs these days. This advancement in technology will also lead to growth in the ACE industry.
ACE – Any product segments or brands that are affecting your business positively or negatively?
PT – Currently, we are witnessing good growth in the television vertical. Smart TVs and 4K TVs are being bought more than normal TVs. Even though the prices of smart TVs are higher than normal TVs, the Indian consumer has evolved and prefers upgraded technologies. They want to watch Netflix, Amazon, Hotstar or any other programmes at home with 4K picture quality and smart feature functions. In fact, we now sell smart TVs only.
With companies adopting competitive pricing strategy to boost their sales, the prices of these smart consumer products have come down in the market, making them affordable for Indian consumers. This is one reason behind the growth of the Indian TV business and my business as well.
ACE – Any product segment or brand that is affecting your business?
PT – Generally, the competition in TV business is one of the toughest. As per me, LG and Samsung are the biggest competitors in the home appliances and TV businesses in India. If you talk especially about the technology in TV vertical, I feel LG’s OLED TV is a winner in the Indian market. But Samsung has also recently launched its 8K QLED TVs, which might give LG retailers like me more competition.
ACE – Any new strategy implemented by your team in this FY that’s resulting in growth?
PT – This year we updated our product display section especially in the LED TVs and refrigerators segment to increase customer attention. We have placed more products in the display this year. We are also focusing on displaying big size TVs.
With this new strategy, we have witnessed almost double jump in sales of 50 and 55-inches TVs. This has also increased the average bill size at Ganpati Electronics. Providing live demo of smart TVs using Wi-Fi internet connection has amazingly helped in the sale of these.
We always keep top models of washing machines and refrigerators active to give real-like experience to customers. I am sure that has also helped us in increasing the sales of premium home appliances.
ACE – What’s your strategy for developing your team to guide and sell the right product to your customers?
PT – I am of firm belief that the quality of product demos decides whether you will make a sale or not. I have been in the customer service industry since the beginning of my business and I have learnt that good service plays is critical for the success of any and every business.
We like to learn about new technologies and features in consumer electronics. The same is discussed with the team for providing better demos. These types of discussions are done on a weekly basis or in the morning. LG Electronics also provides training on its new products and technologies on a regular basis.
ACE – What’s your strategy for products that get discontinued or obsolete? How do you avoid losses on them?
PT – It is indeed a fact that technology in consumer electronics is evolving very fast. Indian consumers are also now quite informed about the latest technology and new products.
But they do cost a little bit more than the previous ones, so the difference in budget matters for the customers. Whenever the obsolete/discontinued products need to be liquidated, then the company supports us in doing so by launching different schemes.
ACE – How are you handling the challenges created by Online portals like Amazon and Flipkart?
PT – We face major challenges from the e-commerce portals only during their sales drive period. This does not extends by more than two to four days. Infact, challenges from the e-commerce portals have reduced in the last six months. These challenges are even lesser in the TVs and home appliances business.
ACE – Are you accepting digital payments from customers through Debit Cards, Credit Cards, PayTM, etc? Are you seeing an increase in the same?
PT – Digital payment option are a must now. I don’t think a business in the retail sector can survive without offering digital payment options.
We accept almost all types of digital payments. The transactions at our store using digital mediums are around 80 to 90 per cent. Rest are from checks and cash. We have observed in the past that if you don’t have the digital payment option or there are limited payment options, then the chances of losing sales and customers increase.
Digital payments bring down the cost margin to around 1.5 percent. But that is obvious, and we have to bear that cost reduction. In the modern era, you can’t stand in the market without digital payment options.
ACE – Any jump in the number of people opting for EMI options?
PT – The jump is bigger than we expected. We are doing around 60 to 70 per cent of our total sales business through equated monthly installments (EMIs), in which we have options like Bajaj Finance, HDFC and off-course there are credit cards.
Nowadays, the trend of paying EMI through financial companies is increasing because they don’t charge any extra amount. Generally, they require only ID, address and income proof that everyone has, which is why they are favorites in the market of consumer electronics finance.
ACE – Do you have the ambition to launch your own brand of products in the future too? If yes, any product range that you’d like to?
PT – We are not planning on launching our own products or brand in the consumer electronics domain. With so many retailers selling products like LED, speaker and other products, it has become easy to sell products and build own brand identity in the market but that is not a long-term prospect. Unless you have a strong service network and product part back-up, it is difficult to achieve success.
EFY ACE thanks Ganpati Electronics and Pradeep Taneja for his valuable insights on India’s ACE Industry. This conversation originally took place in Hindi.