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Tata’s Croma plans growth on pushing products and presence

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Croma, the Tatas’consumer durable and electronics chain, plans to launch new products in niche categories such as jewellery cleaners, renegotiate rentals with owners and increase its presence in metros to boost revenues, a top company official said.

The chain is planning to launch 10 to 15 new products in smaller home appliances and specialised wellness products and expand the current private label portfolio under the ‘Croma’ brand in the coming months.

The retailer currently sells 30-odd products under the Croma name — such as wine coolers, handy vacuum cleaners, bag-less vaccum cleaners, bendable massagers — which are 10 to 15 per cent cheaper than national brands. It has recently launched its own laptops in two variants and sold more than 125 pieces in three weeks, said Ajit Joshi, chief executive officer of Infiniti Retail, a part of Tata Sons, which runs Croma stores.

“We will launch those products which we can source in bulk and can be converted into commodity. We will go for such products which are specialised and niche. It is a good time to launch private labels. If you give good quality products at the right price, people will buy them,” Joshi said.

He said the chain will keep the percentage of revenues from private labels under 20 per cent in the coming years, as they require a lot of research and development and other capabilities to launch products the way manufacturers do.

Currently, India’s consumer durable market is estimated at Rs 32,000 crore and has players such as Next, Tata’s Croma, Reliance Digital, Future Group’s EZone and Electronic Bazaar, apart from thousands of stand-alone stores. The growth rate in the durables market is expected to be 10-12 per cent this year, compared with 10 per cent in 2008.

Consumer durable and electronic chains such as Videocon’s Next and Reliance Digital, part of Reliance Industries, are also planning to launch more of private labels to increase their revenues. Kishore Biyani’s Future Group sells consumer durables under the Sensei and Koryo brands.

Croma tests its private labels at its back-end partner Woolworths’ office in Hong Kong and Singapore before it sells it in India.

“Whenever we launch or phase out any products, we discuss it in our joint committee meetings,’’ Joshi said. All Croma stores in a particular state are attached to a distribution centre managed by Woolworths. For example, Bhiwandi near Mumbai takes care of supply needs of 11 stores in Mumbai and three in Pune.

Joshi said the chain is not burning the bridge with national brands as it expands its private label portfolio. “We provide a uniform platform at Croma and sell both our own brands and that of others and allow shoppers to choose their own products,’’ he said.

While Croma has added new categories such as modular kitchens and laptops, the chain is in the process of phasing out music software such as DVDs,VCDs and others due to competition from illegal music, large space requirements among others.

Source: Business Standard

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