Diwali bonanza: Electronics chains see growth in sales as e-tail discounts taper
By Chaitanya Muppala | November 03, 2016
Tata's consumer electronics chain Croma posted a 20% decline in sales in FY16
Despite tough competition from e-commerce players, electronics and infotech retailers say they’re seeing a revival in sales growth after a negative growth last year.
The main reason for this revival is the law enforced by the central government for marketplaces early this year, which prohibited marketplaces from offering discounts and capping total sales originating from a group company or one vendor at 25 per cent.
Alok Gupta, CEO of Essar Retail, which runs The Mobile Store, says the chain is seeing flat to marginal growth in sales. “Though online portals are major a competition, their discounts are down thanks to regulations and investors.”
He said The Mobile Store will start selling products online, too. “Customers are exploring online and buying offline and vice-versa. We need to evolve fast to cater to their needs.”
On Tuesday, reports said Tata-owned electronics chain Croma posted a 20 per cent decline in its sales for FY16.
Subhash Chandra, managing director of Sangeeta Mobiles, said the chain has seen a growth of 30 per cent in the first seven months of this financial year compared to the year-ago period.
“Today, brands such as Asus and Motorola are available in our stores also, which were available only online earlier. Predatory pricing has also come down,” he said.
Chandra also said the new regulation restricting marketplaces from discounting products helped them. “Online portals are also bleeding heavily and have huge accumulated losses. There is pressure from investors to cut down on discounting.”
He added that besides the aggressive advertising on the offers and products, the chain has also launched many schemes. Under one of its schemes, if a brands drops prices within one month of purchase, then the customer would get a refund.
An executive with Kishore Biyani-led Future group said Ezone – its electronics and durable format – had experienced a fall in sales, especially in mobile phones and electronics items. However, there was no impact on large durables, he added.