Making the first move in tie-ups between retail majors and durables suppliers, Videocon Industries Ltd on Wednesday signed a Rs 350-crore deal with Future Group company Home Solutions Retail India Limited.
The deal enables Home Solutions to source electronics and appliances for their in-store brands Sensei and Koryo. These products, meant just for Home Solutions, will be retailed exclusively from Future Group formats E-Zone and Electronics Bazaar. As reported by FE earlier, Mukesh Ambani-promoted Reliance Retail is also in talks with Videocon to source colour televisions, glass shells and colour picture tubes for its durables retail foray. As part of the agreement, which is expected to be finalised soon, Reliance will sell colour TV sets from Videocon at its retail outlets under the ‘Reliance’ brand name.
Both the deals will substantially boost Videocon’s overall sale of colour TVs, which currently stands at 3 million a year.
This includes flagship brand Videocon and sub-brands like Sansui, Toshiba, Hyundai, Akai, Kenstar, Electrolux, Kelvinator. Industry leader LG Electronics India at present has sales of 5.5 lakh TVs a year. Says Suresh Khanna, secretary-general, Consumer Electronics and Television Manufacturers’ Association, “The move will boost volumes in the industry apart from providing more scope to Videocon to spur volumes.”
Videocon and Home Solutions also signed another agreement which would require Home Solutions to give preferred vendor status to the Videocon brand. Home Solutions would use this agreement to stock and sell all Videocon products at all its outlets, Videocon said in a release.
The agreement was signed by PN Dhoot, director, Videocon Industries, and Kishore Biyani, CEO, Future Group. The partnership is aimed at gaining a competitive edge over cheap durable imports from China.
Dhoot said, “All distribution channels are equally important. But this strategic partnership acknowledges the momentum that organised retail would assume in the days to come.”
Added Biyani, “Through this agreement, we will be able to develop our private labels. Besides, e-Zone and Electronics Bazaar cater for all sections of society and Videocon’s wide range of products and multi-location manufacturing facilities will definitely help meet the rising expectations.”
Source : Financial Express
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