With 400 stores, Digiworld, the retail initiative from the Videocon
Group, has a pan-India presence. It now plans to increase the number of
stores to 1000 by the end of 2013 with a special focus on tier II and
tier III markets. In an interview with FE’s Twishy, Jaideep Rathore,
chief operating officer, Digiworld, speaks about the sales trends in
rural markets, Digiworld’s new brand identity and the threat from
e-commerce sites. Edited excerpts.
Can you explain how the Digiworld business model works?
The franchisees directly deal with the individual brands. Representatives from these brands frequently visit the stores and analyse the trends. A franchisee gets everything that it needs at the store level, thus helping it push sales. In terms of after-sales service, all these franchisees are again linked to the brands.
What is the strategy that you have adopted for rural markets?
We are present in B-class towns but this year we want to expand to the C-class towns aggressively. The stores are similar to the ones found in urban areas, and tier II and tier III cities account for 65% of our business. The big cities don’t witness exponential growth in the middle range of products but there is high margin in the C-class towns because there is hardly any competition in these markets. The major challenge is to provide logistics support. We have connected all the brands directly to the franchisees so that they have 24/7 access to the actual brands, which is an experiment done for the first time in the retail market.
What was the idea behind reintroducing Digiworld under a new name DW?
The new brand identity is in tune with the brand’s growth, thus giving it a progressive, dynamic and contemporary look. The logo is the abbreviated form of Digiworld (DW) in orange, red and blue to specify the three product divisions of the brand, namely, consumer electronics, home appliances and mobile phone. The tagline is now ‘Digitally WOW’. The essence of this new brand positioning is friendlier and happier communication with consumers.
What are the hot selling products at DigiWorld?
We have all the group brands such as Videocon, Kelvinator, Kenstar and Sansui. We are doing well in the electronics category with home theatres and DVD players selling very well. In the appliances category, the top-selling item is air-conditioners followed by washing machines and refrigerators. We are the largest sellers of iPhones and Samsung Galaxy smartphones. In tier II and III cities, mobile phones are doing well followed by sub-32-inch LCDs. Sub-300 litre refrigerators and washing machines up to 6.5-7 kg capacity are selling well.
What is DigiWorld’s target for this fiscal?
Within the organised business in some of the categories, we have a share of more than 20%. We have more than 400 stores and our turnover last year was Rs 700 crore and we are aiming at Rs 1200 crore this year. By the end of 2013, we plan to have 1,000 stores.
Do you see small stores going out of business after a period of time?
Yes, they will. Sooner or later, foreign direct investment (FDI) will come in and only organised retail will stay. However, these pop-and-mom stores will not shut down but they will have difficulty in managing themselves and competing with organised retail. They may get amalgamated into some kind of association with the retail giants. It is a big possibility and there is always an opportunity for them to become a DigiWorld franchisee.
Do you see e-commerce sites as a threat?
E-commerce is growing but Indians are not comfortable buying off the online rack as they want to have a feel of the product and then buy it unlike that of people in the West. India will take another five to six years to adapt to the e-commerce model but it is a very important part of the retail industry. We have our own e-commerce model, but we are limiting ourselves to technology products only as that business will take time to shape up as it is still a developing one.
Can you explain how the Digiworld business model works?
The franchisees directly deal with the individual brands. Representatives from these brands frequently visit the stores and analyse the trends. A franchisee gets everything that it needs at the store level, thus helping it push sales. In terms of after-sales service, all these franchisees are again linked to the brands.
What is the strategy that you have adopted for rural markets?
We are present in B-class towns but this year we want to expand to the C-class towns aggressively. The stores are similar to the ones found in urban areas, and tier II and tier III cities account for 65% of our business. The big cities don’t witness exponential growth in the middle range of products but there is high margin in the C-class towns because there is hardly any competition in these markets. The major challenge is to provide logistics support. We have connected all the brands directly to the franchisees so that they have 24/7 access to the actual brands, which is an experiment done for the first time in the retail market.
What was the idea behind reintroducing Digiworld under a new name DW?
The new brand identity is in tune with the brand’s growth, thus giving it a progressive, dynamic and contemporary look. The logo is the abbreviated form of Digiworld (DW) in orange, red and blue to specify the three product divisions of the brand, namely, consumer electronics, home appliances and mobile phone. The tagline is now ‘Digitally WOW’. The essence of this new brand positioning is friendlier and happier communication with consumers.
What are the hot selling products at DigiWorld?
We have all the group brands such as Videocon, Kelvinator, Kenstar and Sansui. We are doing well in the electronics category with home theatres and DVD players selling very well. In the appliances category, the top-selling item is air-conditioners followed by washing machines and refrigerators. We are the largest sellers of iPhones and Samsung Galaxy smartphones. In tier II and III cities, mobile phones are doing well followed by sub-32-inch LCDs. Sub-300 litre refrigerators and washing machines up to 6.5-7 kg capacity are selling well.
What is DigiWorld’s target for this fiscal?
Within the organised business in some of the categories, we have a share of more than 20%. We have more than 400 stores and our turnover last year was Rs 700 crore and we are aiming at Rs 1200 crore this year. By the end of 2013, we plan to have 1,000 stores.
Do you see small stores going out of business after a period of time?
Yes, they will. Sooner or later, foreign direct investment (FDI) will come in and only organised retail will stay. However, these pop-and-mom stores will not shut down but they will have difficulty in managing themselves and competing with organised retail. They may get amalgamated into some kind of association with the retail giants. It is a big possibility and there is always an opportunity for them to become a DigiWorld franchisee.
Do you see e-commerce sites as a threat?
E-commerce is growing but Indians are not comfortable buying off the online rack as they want to have a feel of the product and then buy it unlike that of people in the West. India will take another five to six years to adapt to the e-commerce model but it is a very important part of the retail industry. We have our own e-commerce model, but we are limiting ourselves to technology products only as that business will take time to shape up as it is still a developing one.
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