Selling air-conditioners, refrigerators and television panels online was a far-fetched thought for the 54-year-old consumer durable retail company, Vijay Sales, till the COVID-19 pandemic struck India last year and the nation went into a complete lockdown.
Consumers increasingly opting for online shopping due to the fear of contracting the virus, made Nilesh Gupta, Managing Partner, Vijay Sales, realise that an e-commerce presence was mandatory. In the next few months, the retail chain built its e-commerce presence and within a year, online sales already contributes four per cent of Vijay Sales total revenue.
"We realised that the shift to digital would be faster than what we had expected," explains Gupta. The durable retailer's goal in the next five years is to make online bigger than its offline business. It hopes that online sales would contribute 10-15 per cent of its overall revenue in the next one year. "Earlier, our website was just an information site, but in the last one year we are selling through it. We will shortly introduce video calling facility and enable consumers to avail virtual product demonstrations."
Currently present in tier-one markets in Maharashtra, Gujarat, NCR and Andhra Pradesh, an online presence could give the retailer an opportunity to service smaller towns too, says Gupta. The 110-store chain acquired the Hyderabad-headquartered durable chain, Tirumala Music Center, in 2019 and rebranded it as Vijay Sales.
"We don't intend to aggressively ramp up our physical presence. Our strategy would be to add 8-10 new stores every year and focus a lot more on our online presence."
Gupta says that Vijay Sales' existing customers are already happy to shop online, as they have been interacting with the brand for over five decades.
"Luckily, our attrition rates are low and most of our store sales staff know the customers personally. Therefore, the customers are comfortable shopping online. They speak to our sales staff first and then buy online."
The current lockdown in most parts of the country to fight the second wave of COVID-19 has yet again brought consumer durable sales to a halt. This time round, Gupta is not sure if the customers would return as fast as they did last year, after the lockdown was lifted. The consumer durable sector was among the first to bounce back after the lockdown last year. "This time the number of people impacted are much more than last year. The death rates are high too, and this could impact consumption. Let's wait and watch."
Gupta strongly feels that consumer durables should be categorised as an essential. "How can one stay without an air-conditioner or air-cooler during the summer months or without a refrigerator or a mobile phone? It is as essential as grocery." Last year, air-conditioner and air-cooler sales were badly impacted because of the lockdown during the summer months. It's going to be no different this year too, with most of the major consuming states shut down. "Air-conditioner sales may recover by almost 80 per cent during the course of the year, but air-cooler sales are seasonal and we will end up taking that inventory to next year," says Gupta.