Tata Croma We help you buy TATA CROMA, first store came up on October 9th, 2006. Infiniti Retail operates a national chain of multi-brand electronics stores under the brand name Croma. It is a wholly owned subsidiary of Tata Sons, the holding company of the Tata Group. The company, headquartered in Mumbai, has a technical and sourcing agreement with Australian retail giant Woolworths until October, 2011 when they parted. Under the arrangement Infiniti Retail owns and runs retail operations in India while Woolworths provides technical support and strategic sourcing facilities through its global network. The Croma chain of stores offers, in different cities of India, a wide range of consumer electronics products across categories and brands. The stores are spread over 12,000 to 20,000 sq ft and have more than 6,000 products and 180 brands in eight categories: home entertainment, small appliances, white goods, computers, communication, music, imaging and gaming software CROMA SO FAR Croma’s first store came up in 9th October, 2006. At Mumbai, within 6 month second store came up at Malad in Mumbai. The store has wide display provided detailed information of the product which made decision quicker for the customer and reduced service time. Infiniti Retail has decide to open 28 stores by the end of 2007. Croma wanted to be the best in the business of retail by providing everyday best price and deep discounting because they don’t want to lose any customer. Croma took the help of durables from Woolworth because Croma didn’t had it and it was trying to establish Croma wanted to provide a wide range of variety to its customers. Tata invested Rs. 320 Crore in Croma to increase it retail stores into Bangalore and Delhi by December 2007. In March 2008, Dell ties up with Croma. With increasing inflation, Croma has decided to improve its logistics efficiencies. Croma outsourced its product through Woolworth so during recession, they decide to get the products from the local vendors like LG, Samsung, Sony abd HP. This saved the cost in the supply chain and increased their bottom-line. In 2009, Croma started selling the application forms for Tata Nano; they will give discount of Rs. 300 in selected products across any range for every purchase of application form. Nano will also be find space in the retail store. It was decide to open 52 retail store by FY 10 and 100 retail stores by FY12. Tata group invested Rs. 150 Cr for the brand expansion of Croma. In September 2009 Tata sons decide to dilute its stake by selling some percentage of stake to the Private Equity investors because it wanted to focus on its own brand and product categories. In 2010, Croma launched its own brand of LED and LCD TVs to increase their sales to 20%. By June 2010, the marginal issues have come up between the local vendors, because they have include the local vendors in their supply chain.
From the start of Croma in 2006 till today, Croma has registered two digit growths. It has also included the local vendors which has saved their cost but increased their profits. Croma has took the help of Woolworth for sourcing, strategies and technical support. Croma has expanded throughout the country and is still expanding with megastores and zip stores formats. It has also started his own brand has established itself in the country. Market Share Croma holds a good market position of about 18% in consumer durable and electronic retail segment. The biggest competitor is eZone which is 37% strong followed by NEXT with 27%, reliance digital has 13% and others at about 5%. STORES Tata Croma is operating in two formats, the Megastore and the Zip store. The Zip stores are found in airports also. Megastores are large format stores, the store size ranges from 15000 – 20000sq. ft, is well planned and designed for world class in store experience and backed by robust after sales service. The stores are in Mumbai, Pune, Bangalore, Chennai, Aurangabad, Delhi NCR, Hyderabad, Punjab and Gujarat. The stores in Mumbai ranges from 15000-22000 sq. ft in area, in Bangalore the size is 22.000 sq. ft. the Croma Zip stores has size ranges of 2500 – 6000 sq. ft. There are total 62 stores consisting of 38 stores in the high streets and 24 stores in the malls spread over 7 cities and 2 states in India. There are 6 Zip stores; 1 in Santacruz airport, Vashi and Fort in Mumbai, 1 in Delhi airport, 1 in T3 Domestic airline and T3 international airline. DISRTIBUTION OF STORES ACROSS INDIA. CITIES/STATES MUMABI
HIGHSTREETS 6
MALLS 8
PUNE BENGALURU CHENNAI HYDERABAD AURANGABAD DELHI NCR
4 10 4 3 9
2 2 1 5
PUNJAB (Jalandhar 2 and Amritsar) GUJARAT( Ahmedabad, Surat, Rajkot and Vadodara)
-
ZIPSTORES 3(Santacruz Airport,Fort,And Vashi) 3(Delhi Airport, T3 domestic and T3 international) -
6
-
Expansion Plans After almost five years of its inception the company is venturing into online retailing space. The company calls it a new strategy to tap the large number of net savvy customers and plans to cash on online retail space that is getting hotter with each passing day. A source from the company puts that it is eyeing on implementing some unique features like cash on delivery to its upcoming online shop so as to suit customers of all types. Tata Croma is also planning on adding 10 more stores to take the total count of its stores to 75 all over India. Already Tata Sons has allocated Rs. 200 crore for this exercise. Also, a dedicated after sales service facility is in the offing for its customers. For the first phase, the service centers would be opened at Delhi, Mumbai and Bangalore and cater to Croma branded products Competition But the going may not be easy for Tata Croma as there are established players in the space. For instance, the Future Group, with its online retail portal FutureBazaar.com is eyeing on having at least 10% of its total retail sales from this medium. Probably, they may have bigger plans for that to happen And other players including eBay, FlipKart etc. may also give a big competition to the upcoming Tata Croma online store. While eBay needs no introduction further in terms of its share of the cake, Flipkart, an upstart in this segment, is gaining much popularity these days owing to its dedicated services and support. There are others too that have established themselves quite well in online retailing. Product
6000 products, 180 brands, 50 categories 31% revenues from computer and laptops 6-8% from ‘Croma’ label goods
Consumer durables and electronics include – Televisions, Refrigerators, Air conditioners, washing machines, Kitchen appliances, Gaming devices, Computers and laptops, Mobiles and accessories, cameras, etc. Target Segment Value for money – best products with reasonable pricing, Best discounts and offers, Warranties and guaranties,
FINANCIAL POSITION OF CROMA – Croma has generated 657 crore of 2008-09. Croma has generated around 1000 crore revenue at the end of 2009. Tata Group has invested around 50 crores capex in year 2009 into Croma. Company has recently received 200 crore from Tata group to fund network expansion and other activites. For Year 2010-11, Total Revenue for Infiniti Retail’s total revenue stood at Rs. 1549 Crore. But Company has not break even yet, although since the last five years, Infiniti has managed to grow by over 50% annually.
Turnover Year 2007-08 2008-09 2009-10 2010-11
Revenue Rs 667 Cr Rs 1000 Cr Rs 1021 Cr Rs 1700 Cr
IMAPCT OF SLOWDOWN During the slowdown, Croma decided to go for revenue sharing because the rentals are and it constitutes 30% - 40% of the total cost per store. Croma also changed their supply chain by tying up with the local customers. The last slowdown has made all the retailers to work faster and also made Croma to act faster. Croma renegotiated, increased the retail size and revenue sharing during the slow down. During the recent recession, Croma decided to renegotiate the rental, controlling administrative expenses and investing in the IT firms to increase profits. At present, Croma has negotiated rental for 70% of its properties and is implementing ERP solutions by investing in IT which will not only save cost but also increase their profits. DIFFERNECE BETWEEN TATA CROMA AND WOOLWORTH The 5 year old agreement between Tata Croma and Woolworth has come to an end and has lead to parting of the alliance. The Australian based company wanted to deepen the die-up if the Indian government allowed direct investment in the retail market. The Woolworths view this agreement in a big picture and they wanted to be as a sourcing company. The disagreement by the Croma has taken the Woolworths by surprise because they didn’t find the reason as time bound. The reason for separation was not the investment or money matter. Croma has started building its warehouses in Mumbai, Bengaluru and Chennai though Infiniti Retail has been using the warehouses of the Woolworth for the retail business, Woolworth has been in the retail
business for last 85 years and they have been providing strategy and technical help in the retail business for the development of Croma. Croma has been making business relation with large and small companies to carry on their business in the country. After having all the information gathered, both the companies decide to split. The split will effect Croma because till now they haven’t been established properly and they are making warehouse throughout the country for the supplies of the products. Woolworth has been providing them the retail strategy and technical support which Croma lacked and they will be still lacking. Croma is still developing so strategy is required to enter into every corners of the country which the Croma will lack and also the technical support.
REFERENCES
http://www.watblog.com/2011/08/02/tata-croma-to-launch-an-online-store/ http://www.tata.com/company/profile.aspx?sectid=oH90Rc8X7Dg= http://in.finance.yahoo.com/news/Tata-Group-Infiniti-Retail-contifyinvestment115097139.html?x=0 http://articles.economictimes.indiatimes.com/2010-01-27/news/27597485_1_formats-cromavineet-kapila http://articles.economictimes.indiatimes.com/2009-05-10/news/27646997_1_croma-rentals-erpsolutions http://articles.economictimes.indiatimes.com/keyword/croma/recent/2
