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Purvita \n Chatterjee, The Hindu Businessline<\/i><\/p>\n Purvita \n Chatterjee, The Hindu Businessline<\/i><\/p>\n
Mumbai, \n October 7, 2013<\/i><\/p>\n
![\"starbucks](\"..\/images\/vijay-sales.jpg\")
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\n In the late 1960s, when televisions were still unheard of in India, \n Nanu Gupta was busy setting up a store for consumer durables in \n the heart of Mumbai. Having worked with an Usha International \n distributor, he knew the nuances of the consumer durables business. \n He decided to strike out on his own by selling the same sewing \n machines and fans he had dealt with earlier.<\/p>\n
Funds were limited and so was space. Gupta borrowed Rs 2,000 \n from family and friends to set up his first store in Mahim in \n 1967. To make room for customers, he had to keep a folding chair \n in the 40 sq ft store named Vijay Sales after his younger brother.<\/p>\n
Gupta started off by taking goods on credit directly from manufacturers \n and paying them after sales. Direct purchases helped him save \n on dealer commissions and pass on the benefit to consumers in \n the form of prices lower than the competitors. The store was soon \n a hit and footfalls multiplied rapidly.<\/p>\n
DOING DIFFERENTLY<\/b><\/p>\n
The outlet now measures 40,000 sq. ft. and has become a landmark \n in the island-city. Vijay Sales is now run by the second generation \n with Nilesh Gupta (son of Nanu Gupta) as the Managing Partner.<\/p>\n
“It was not easy to get customers as there was tough competition \n even in those days. We kept all the TV sets on at our stores unlike \n competitors, who switched them off. This was a way to attract \n customers to our stores,” says Nilesh Gupta.<\/p>\n
“Today, we try to beat the competition by bringing in branded \n flat panel and plasma TVs even before companies start advertising \n the new models,’’ he adds.<\/p>\n
Vijay Sales stocks its goods in nine warehouses that supply to \n all the 54 stores across Maharashtra, Gujarat and Delhi — \n the classic hub-and-spoke model. That helps it maintain optimum \n inventory levels, without over- or under-stocking any item, besides \n reducing warehousing costs. “Logistics is very critical to \n our business and we maintain individual distribution centres in \n every city,” says Nilesh Gupta.<\/p>\n
What has also helped the firm do better than competition is its \n willingness to buy out the inventory MNC players are saddled with \n at a discounted price and charge consumers cheaper rates. “That \n helps propel sales,” he adds.<\/p>\n
SCALING UP<\/b><\/p>\n
Vijay Sales scaled up rapidly from 2006, sensing impending competition \n from biggies such as Reliance Retail, Croma. “Modern trade \n players actually challenged us to scale up and there were even \n some who wanted to buy us out. But that was the time we decided \n to expand our operations and entered new States,’’ said \n Gupta.<\/p>\n
This expansion was not without its share of challenges. Being \n an unknown retailer in the northern market, there was the question \n of trust. “We asked consumers to call up just about anyone \n they knew in Mumbai to verify our credibility. That worked for \n us.” Outside Maharashtra, the firm is now better known as \n ‘Mumbai Wali Company’.<\/p>\n
Devangshu Dutta, Managing Director of retail consultancy firm \n Third Eyesight, gives the company a thumbs up. “Vijay Sales \n has been able to transform itself, in a staged manner, from a \n family-run business to a modern trade format.”<\/b> <\/p>\n
The consumer durables business continues to run on thin margins, \n about three per cent of net sales, making it difficult for smaller \n players to scale up. But Vijay Sales does not want to exercise \n the franchise option to widen its reach. “We feel a franchise \n is unlikely to add any value to the business. The durable brands \n already have equity and the business will not be any different \n if it were to be run by a franchise,’’ says Nilesh Gupta.<\/p>\n
PROFITABILITY<\/b><\/p>\n
While the firm claims it has been making profits consistently \n (Gupta says they were profitable from Day 1), sustaining them \n could be difficult in the current economic environment. “Expenses \n are on the rise. Companies are reducing the margins but if the \n cost increases are passed on to the consumers, it will result \n in a massive slowdown. Also, the rising dollar has affected our \n import-dependent industry,’’ observes Nilesh Gupta.<\/p>\n
Given the uncertain business scenario, Vijay Sales is not in \n a hurry to become a pan-India player.<\/p>\n
But its ‘slow and steady’ approach will ensure that \n it doesn’t have to lament over expansion at a later date. \n “We are not in a hurry; we have been around for the last \n 46 years and would want to last many more years,’’ says \n Nilesh Gupta.<\/p>\n","protected":false},"excerpt":{"rendered":"
Purvita Chatterjee, The Hindu Businessline Mumbai, October 7, 2013 In the late 1960s, when televisions were still unheard of in India, Nanu Gupta was busy setting up a store for consumer durables in the heart of Mumbai. Having worked with an Usha International distributor, he knew the nuances of the consumer durables business. He decided […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-3459","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n