Viveks to launch own brands of durables

In a rare move, a local consumer electronics retailer is gearing up to take on the brands it sells by launching its own brand of home appliances.

The Chennai-based Viveks, the largest consumer electronics retailer in the country with a turnover of Rs 200 crore, is planning to introduce a range of small appliances under its own brandname, Viveks.

"We are looking at appliances in the sub Rs 5,000 category like mixer-grinders, blenders, table fans and iron boxes," said BA Kodandarama Setty, chairman and managing director, Vivek Ltd.

Setty said the move will help increase margins and profitability. By the end of 2005, Viveks plans to have 100 stores in the country and to double its turnover from the current level of Rs 200 crore to 500 crore, he added.

The company is already testing the waters in the private label business with wet-grinders, which it currently sources from manufacturers in Coimbatore.

According to Setty, Viveks has even identified suppliers, primarily in Tamil Nadu, who can generate the volumes consistently to meet its demand. "Traditionally, this is how retailers in the more mature markets go up the value chain," he said.

Viveks has a chain of 43 stores in Chennai, Bangalore and other cities in Tamil Nadu. Recently, it acquired two smaller Chennai-based consumer durables retail chains, Jainsons and Spencer's, owned by the RPG group, and another one in Salem in Tamil Nadu.

Despite receiving requests from mall developers in Delhi and other cities north of the Vindhyas to set up their stores, Viveks is adopting a conservative approach in its expansion plans.

"We get a new invitation every week. However, we have resisted the temptation so far. Viveks has an unfinished agenda in south India where we are just scratching the surface of a huge retail opportunity," Setty said.

Having opened six stores in Bangalore over the last four years, Viveks wants to gradually expand into other cities in Karnataka and Andhra Pradesh.

In the mid 1990s, the 20-year-old company recognised that it has to come out of its family business mindset to firmly establish itself as a category-killer in consumer durables retailing. "Our stores today are run by professional managers and formally trained sales people," said Setty.

From being a sweatshop-like seller of colour TVs, Viveks' showrooms are now redesigned and bear a sleeker, more contemporary look.