Tata's consumer electronics and durables chain, Croma, is open for business in Mumbai. But as CNBC-TV18 reports, the pitch isn't lower prices but a brand new experience.
'We help you buy' is the opening gambit for Tata's durable and electronic goods retail venture, Croma. It's a better shopping experience, but not low prices.
This is in contrast to competition like Pantaloon and Reliance that is likely to play the pricing card. But Tata might start pushing the envelope, once they achieve a pan-Indian presence.
Ajit Joshi, CEO, Infiniti Retail says, "Margins are thin, they will get better only with volume. We intend to roll out 30 stores in 18 months and 100 stores by 2010. We'd love to pass on that benefit to customers."
However, the credit for Croma stocking 6,000 products spanning IT, personal electronics to appliances, goes to Woolworths. The Australian retailer is backing Tatas with a sourcing and technology tie-up.
Experts say, this won't be a cakewalk for Woolworths that commands margins as high as 25 per cent to 30 per cent overseas, while the Indians are operating at close to 8 per cent. Meanwhile local players like Vijay Sales and Sumaria are hoping that their consumer rapport will help them take on Croma-like competition and emerge with flying colours.
Nihal Shah, director, Sumaria says, "The strongest reason for a consumer shift is price and I don't know to what extent these new players will be price players because at this time, bottomlines are under severe pressure for everybody."
Sheer curiosity will draw first timers to Croma. In the long run though attractive bargains will give it a durable clientele. Of course, only 3 per cent of all durables sold are by branded retail stores, so the potential is huge.