She wants her TVs to be the Zara of the electronics world, not Gucci or Pantaloon. And she’s going about it in the way she knows best: convincing customers to buy because she is selling.
TV’S CONSUMMATE SALESPERSON
Saraf heard him out, and then told him she was not chasing volumes. In fact, she added, she was planning to cut production of the few 24-inch screens that Vu produced.
The margins become almost non-existent when you go below a certain size, she tells me when I meet her at The St. Regis hotel in Mumbai. “I buy one Starbucks coffee for me and one for you and there goes half my profit for that small TV,” she says, half in jest. I check the prices later, pretty sure that she was exaggerating to make a point. A tall cappuccino costs Rs 175, so she’s looking at a margin of roughly Rs 700 on a TV that costs on average, Rs 10,000; that’s 7%. Globally, television sellers have been forced to slash margins to 10%plus from the glory days of 50%-plus, thanks to the higher cost of production and far stiffer competition than ever before.
When I ask, she says she doesn’t share margin numbers because she has dealers ranging from online biggie Flipkart to Kohinoor Stores, and that means a huge difference in margins. Like most other players, Vu throws in installation and some service for free along with every set. Installation costs are the same regardless of the size of the TV, she says, which means margins on the smaller sets are anaemic.
The conversation with the dealer, and later with me, pretty much sums up Saraf ’s approach to business: Gun for profits and a luxury niche, rather than sweating over volumes. It’s a bold move, given that she’s up against giants like Samsung and Sony with their huge research spends and marketing muscle. But she doesn’t want to compete with the likes of Videocon and Onida at the other end of the spectrum.
Diese Geschichte stammt aus der November 2016-Ausgabe von Fortune India.
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Diese Geschichte stammt aus der November 2016-Ausgabe von Fortune India.
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