Japanese manufacturing giant of consumer goods, Sansui, is due to go live through exclusively tying up with Indian marketplace biggie Flipkart to sell its branded air-conditioners as well as selected models of refrigerators and televisions; in India only.
With the advent of smartphones having super fast and secure internet access, the ever increasing Indian consumer base are increasingly inclining towards online marketplaces for buying consumer products particularly mobile phones and other durable items such as TV and ACs which is evident in their five-fold increase in sales relative to last year’s data. The same thing is also clearly reflected in the Internet and Mobile Association of India and IMRB International’s last year’s report, tagging consumer durables as the third-largest contributing factor with 14%, i.e. INR 3,404 crore business under their sleeves; within the entire e-commerce transaction of Rs 24,046 crore, preceded only by mobile phones and fashion articles. With all these data in favor of ecommerce route and the ease of brand-building in online sector, Sansui, whose online trade is not their prime contributor by far, are looking to sharpen things up by entering the e-retail-only mode for few of their products at least.
According to the COO of Sansui, Mr. Amitabh Tiwari, being a seasonal product; air-conditioners sales in itself carry a huge cost as far as its offline retailing is concerned. More so, the offline stores of Sansui in general observed a 25% decline in sales in the month of July, one of the cream times of selling air conditioners in India. While all these concerns tormented the authorities of the Japanese company, the three-digit growth in sales of their product through Flipkart and that too at a drastically low expense from their end came as a much needed relief to the officials; which also insisted them to sell all their air-conditioners and certain selected television and refrigerator models through the online channel of Flipkart only.
According to Amitesh Jha, the vice-president of Flipkart retail, stated that Flipkart along with Sansui will initiate aggressive digital marketing campaign to promote the Japanese brand’s exclusive products to help them capture the vast Indian e-market and at the same time will also help sansui by giving consumer information and data from their database.
While the customers will benefit from obtaining quality consumer products at reduced prices alongwith free home delivery and installation services, the commercial benefits that both the involved parties will look to extract from the tie up differ from the individual company’s perspectives.
This initiative will give Sansui a competitive edge over its established rivals like Samsung, LG, Haier, Electrolux etc. by reducing its in-house distribution channel as well as offline marketing and sales cost and at the same time will also aid to etch over other electronics and durables retailing chain competitors like Tata-owned Croma who also recently tied up with Snapdeal, Reliance Digital who tied up with Amazon India etc. The online marketplace will provide them huge consumer base that is otherwise practically impossible to tap in a physical store. Moreover, Flipkart will also provide rich analytics on consumer understanding by giving out customer feedback and account reconciliation information to Sansui to help them understand and subsequently improve their offerings and services.
At a time when the online marketplaces are craving for funds in order to enrich their supply chain to give customers a better shopping experience and thus in the process gain over other host of competitors, this exclusive partnership thus, will not only add up to their fundraising kitty but will also aid to improve their business by enabling them to offer exclusive products from such a big brand on their platform that no one else can offer.
Although the ecommerce sector is presumed to be eating up the business of offline brick and mortar stores of various companies, on the other face of it, they are also providing the same brands with a vast reach to a huge and often otherwise unattended consumer base, at a very convenient and cheap cost. It is now up to the companies how to look at it. As far as Sansui are concerned, their move to tie up with Flipkart, has portrayed a very professional approach to go about the current scenario and find a feasible and convenient solution to their eminent problems which may well also end up opening up new bright possibilities for the company in future as well.