Croma has seen a 300 percent growth for their private label portfolio over the last 3 years even as its total revenue as a retailer has been growing at around 20 percent.
According to Ritesh Ghosal, Chief Marketing Officer at Croma-Infiniti Retail Ltd the demand for private labels accrues from the younger segment who are below 30 years of age, kick-starting their careers, and prone to buying for a shorter span of time, with hopes pinned on updating later to something bigger and better. The demand also stems from the feature-seeking customer, who again turns out to be the younger guy, he added.
Croma has its private label products in AC, refrigerator, television, washing machine, and microwave in the bigger category, full range of kitchen appliances, and products like earphones, headphones and bluetooth speakers.
“Our primary focus is to stay abreast of all the technology developments in every sector, and offer it to the customer at a good price. A growing set of people want the same features and the same benefits, but at a lower price. This is where we serve through the line-up of Croma’s own products,” said Ghosal.
For example, Croma’s 32-inch full HD TV is priced at around Rs 13,900. A branded TV with similar features is priced at around Rs 25,000.
Ghosal said that Croma works with factories in India, China, Thailand, Turkey and other places, and that they demand that their original equipment manufacturer (OEM) partners ensure the same certification, principles and practices that a brand with 100 years of manufacturing experience would have.
According to Ghosal’s understanding, consumers can be segregated into three sections.
The first category would have a firm conviction of the brand and the model that they want. The second category of customers are those who are focused on features, rather than a particular brand. The third category constitutes people who walk into a store and seek help, devoid of any particular features/brand expectations.
Ghosal said that while the first category has no role at all for a private label, the second and third categories would be where the private labels have a role to play, along with the tier-2 brands. The third category becomes a category where the retailer has a lot control, he pointed out, adding that balancing the feature expectations and the wallet size is what private labels focus on.
“Between technological obsolescence and people’s shortening expectation of the lifetime of a product, and the belief of “I will want something bigger and better pretty soon ” are the reasons why people buy the latest specs, but not necessarily pay the price that a Sony or an Apple expects them to pay,” he explained.— The Hindu Business Line