Croma bets big on TN’s Tier 2 towns, to add 200 stores pan-India by 2020

Ritesh Ghosal, CMO, of Infiniti Retail speaks about the company’s plans going forth.

We currently have 8 Croma stores in Chennai, with the last 3 stores being launched over 1.5 years. There is one coming up in Chromepet in the next few months. We had started our journey from Mumbai in 2006, where including the suburbs, we have 30 outlets today. We are back to increasing our retail footprint nationally. We are seriously considering small towns in Tamil Nadu, like Salem, where one outlet will be coming up as well as Coimbatore and Madurai where we are scouting for sites. Our model, by definition, is an asset light one, where the inventory alone is worth Rs 2 cr to Rs 2.5 cr. We made a profit of Rs 16 crore last year. This year, it should be around Rs 30-35 crore. Until last year, we were operating with about 130 stores, and by March 2020, we hope to touch 200 stores pan India.

Retail is a catchment-based business. Before GST came in place, retail was not recognised as a service provider. And store rentals made up for 5 per cent of our toplines. To top it off, we were paying tax upon tax during the VAT regime. This was needlessly inflating our costs and it became a very unfair playground for us to operate in. We had put our expansion plans on hold for a while until the teething troubles of the GST were sorted out and the menace of online operators could be controlled. The new e-Commerce Draft Policy has not yet heralded the level playing field that operators of brick and mortar stores were hoping for. Mom and pop stores and smaller outlets are going to have a hard time catching up with the bigger operators.

Smartphones drive the maximum traffic – almost 2/3rd to 3/4th of it. TVs and electronic audio peripherals are also high in demand, owing to the availability of cheap data plans, which has fuelled the rise of OTT players. We have now set up a special display area within the outlets called Gadgets of Desire, which basically showcase impulse category items – gadgets and accessories, which fall under the personality and lifestyle bracket. Croma’s digital presence contributes just about 3 per cent of the total sales.