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SK Talwar has become quite restless of late. He just can’t seem to settle down in his chair behind the cash counter at Neha Electronics, a standalone consumer durables outlet he opened 13 years ago at Mayur Vihar, a middle-class residential area in East Delhi.
He gets up and starts pacing up and down amidst tens of refrigerators, televisions and washing machines lined up in the crammed showroom. The cause for his worry is right across the road: new, spacious outlets of Next, a consumer electronics retail chain of the Videocon group, and Samsung Plaza, an exclusive outlet of the Korean company.
Large durables retail chains such as Next, Tatas’ Croma and Future Group’s eZone as well as big marketers such as LG , Samsung, Sony and Panasonic are increasingly targeting residential areas for expansion rather than malls and high street, threatening traditional dealer-run outlets much more than perhaps modern retail would ever affect mom-and-pop kiranas.
“We are certainly losing business to the new stores,” says Mr Talwar who has been running the largest consumer durables outlet in the vicinity for more than a decade, selling LG, Sony and Samsung products worth Rs.13 crore a year. And he is offering the best deals to retain his customer base. “Our profit margins may get hit by 2-3%,” he says.
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Durables chains reach doorstep, retailers wary
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