Croma, India’s first specialist retail seller for all brands electronics, was founded in October of 2006. It is owned by Infiniti Retail which is further owned by Tata Sons. Croma in 2006 was the only store of its kind. It had less to no contenders to compete with. There was a time when Croma was viewed as the only store to get your desired electronics at a good discount.
If one ever visits the Croma store, to date, the staff there have knowledge about the products they are selling and one gets excellent discounts albeit it is a showroom in itself. One can get all kinds of electronics from gaming consoles to laptops to home theatres. Nowadays there are EMI options available with different financial companies as well. To make it even better, the officials of those financial companies are there in the store to help you out.
However, there was a time when Croma was hit hard because of some e-commerce websites. The discounts on offer on those websites were way beyond what Croma, a physical store, could offer. It struggled during the first few years as losses and debts kept on rising. Just when they were able to tackle one of those e-commerce giants in Flipkart, Amazon reached India. Those were the times when new strategies were failing for Croma.
In 2016, their losses were at INR 195.64 crores. By the time 2017 fiscal year was over, the losses had downed to a stunning INR 57.09 crores. It seemed like they were winning over their customers. It did not happen overnight. During the e-commerce domination, the customers used to walk in to the stores check the product and buy them online and this is where Croma had to work their magic and they did.
Croma understood that half the battle was won when the customer walked in the store, it was the other half of the battle that they were losing. They used the disadvantages of e-commerce websites to their advantage. They offered as good values with after-sale services on products something the Flipkarts or the Amazons of this world fail to do. Other than this, Croma also introduced its online store, giving its customers a wide array of products to go through.
Apart from this, Croma signed some overseas brands which are exclusively available only in their stores like Hitachi TV or even Super General from the Middle Eastern countries. OnePlus and Xioami, companies which sold their products online were signed by Croma. This enabled them to physically sell two of the most sold smartphones in India.
These strategies of winning over the customers no matter how and bringing in brands unknown to the country has helped them to achieve something for the first time in twelve years. In FY18, Croma netted their first profit. They were up by INR 16.64 crores during the 17-18 fiscal year. The same store growth was up by 13% when compared with the previous year. This has put the company back on track and is looking to expand their 121 store tally in the country. Every year Croma plans and opens up 10-12 stores but now they are planning to open 20 stores in FY19 of 10000 sq. ft. each. Out of those 20, 10 are already up and functioning while the other 10 will see the light sooner rather than later.
The future of the company looks bright as well. The current year growth is well and good as the same store growth has risen from 13% in FY18 to 20% in the ongoing year. The overall growth of Croma also stands at 30% as the launches made in last year are now delivering. This excellent performance has enabled them to another infusion from their parent company. Tata Sons has injected INR 250 crores in Croma last month for super expansion and to get back on the leader charts once and for all.
Despite making profit this year, Croma still has a debt of INR 550 crores which downs by 5% year on year. However, they do not plan to reduce the debt nor increase it. The stores are cash positive now and they want to work their way up from the same. The only thing Croma wants to focus on right now is expansion and the money from it will come from the cash flow of the existing stores and also from the noted investment from their owners.
– Unmesh Phule