: At a time when managing a single retail format
is a challenging task, the country's largest consumer
durable retail group, Vivek, runs three Viveks,
Jainsons and Premier with 50 outlets spread over
2.5-lakh sq.ft of retail space.
Rs330-crore turnover group intends to triple the number
of outlets in five years time.
plan is to have an extensive network of outlets in Tamil
Nadu, Andhra Pradesh, Karnataka and Kerala. However,
we are yet to decide on the format-wise expansion numbers,"
says director, B A Srinivasa.
the group's three formats serve three different market
segments Jainsons in the lower-middle class with
27 outlets under the ownership of Jainsons Corporation;
Vivek's in the mid- and upper middle class segment with
22 outlets owned by Vivek Limited; and Premier, in the
upper end with three outlets under Bysani Consumer Electronics
three decades since 1965 the group owned just three
outlets. In 1995 Vivek & Co became a public limited
company and by 2000 the number of outlets went up to
back our first year turnover was Rs1.6 lakh. Now we
do that in an hour," muses Srinivasa.
of the group's growth happened due to acquisitions.
In 1999 the group bought Jainsons owning 14 showrooms
and in 2003 the company bagged the Spencers Super Store
on lease. The Spencers Super Store has now been rebranded
delay in entering the more lucrative western and northern
markets is explained by Srinivasa. "Our strategy
is different from other retail chains that went national
with one or two stores per city. We would like to cover
the southern states first and then expand to other parts.
The idea is to become a strong regional player first
before gaining the national stature."
group follows the principle of having one outlet every
seven kilometres in a city so as to cover all the localities.
to Srinivasa, consumer durable retailing is a low margin
business that requires tight control over costs. "That
is possible only when we become a strong regional force."
a strong force is a three pronged strategy. First by
opening own stores and the second by franchising while
sourcing is centralised to enjoy the economies of scale.
However the group is yet to decided on the number of
the IT education sector not many retail chains have
succeeded with the franchisee model. The retail group
believes that franchisee model would work for it even
though the white goods retailing is a low margin business.
franchisee would be able to pay the royalty to us by
selling high margin in-store branded products."
With 100 outlets the group can source couple of white
goods and sell under its own brand or as a co-branded
model(s) would be available only in our stores and it
would give us and the franchisees good margins. Today
the laws governing the franchisees are not well codified.
We hope the laws would be in place by the time we increase
our number of outlets by another 50," he adds.
the fact that the goods sold in the retail outlets are
manufactured and priced by others, the group has deftly
managed to differentiate its three formats.
Jainsons outlets are small in size and non airconditioned,
the Vivek's and Premier stores are bigger and airconditioned
ones. The group also runs an after sales service chain
under the Viveks brand.
the three formats have now been segmented based on the
city. In the case of metros and big cities the group
would increase the presence of Viveks and Premier brand
outlets while reserving the Jainsons brand outlets for
smaller cities and towns.
target is to achieve a turnover of Rs1,000 crore by
2010. We are also talking to investors for additional
funds," says Srinivasa.