With Videocon joining the retail bandwagon its interesting to see they have decided to come in the high end electronic segment which surely aligns with their group strategy. Though different from Others like bharati airtel, ITC,reliance which are trying to ride high on Agri Business. Tata on other hand have also ventured in digital lifestyle store format. Interesting to know TATA does not have their own manufacturing line in this space to fill the shelve but will be dependent on other providers.
If we look at the segment these 2 players which to build up. It has got a good margin call and people are not comfortable even abroad with idea to pickup television from the woolsworth or coles next door this means Vishal Megamart and other big retail players would not pose a really big threat to the format. The problem this section will face is from existing single brand revolving flagship stores. Example Sony World, LG,HCL digital lifestyle store etc. Though for videocon investing in brand “NEXT” will pay off as end of the day its in line with retail strategy being followed by other consumer electronics providers.
Though for TATA its a different ball game altogether. They have to work two ways. First create efficent supply chain and invest in shelf space. They will be competing with players at two different spectrum first with supply chain organizations like redington whose pie they will be eating into.Though they have tied up with Woolsworth for this end of spectrum. It will help in reducing the overall margin hence offering as player on price cant be expected. Secondly offcourse the small time next door retailers who have been converting from just another consumer electronic retailer to a branded life style digital store with all branding sponsored by big brands like samsung,sony etc.