Help us understand about region specific festivals of Onam and Ganesh Chaturthi, which are ahead of big national festivals Dussehra, Diwali, what is the kind of demand that you saw?
Onam seems to be have been very good, and Ganesh Chaturthi traditionally for the last three-four years does not give us a big insight into all products but demand increased. I think looking back, this season we are expecting quite good demand, maybe one of the best in the last three-four years.
My question is split into two parts: What happens to the high-end demand this time. A) There is a chip shortage and B) we both know that last year there was a compulsive binge because of work at home. Do you think that the end of the spectrum which could be called as high-end consumer durable market may take a hit because demand may not be strong and whatever demand is there, there is the chip shortage issue?
What we are seeing is the high end is improving and growing at a faster rate than the average. Last year, when people bought home a laptop or a television, they never realised that work and learn from home is going to continue and is going to be endless. Even now we do not know whether schools will start in the next three months or six months or maybe little more.
Most want to upgrade it to the best because this is now going to be their life. So on the upgrade segment, there is huge activity which is happening in the market and this COVID has caused a structural shift in the industry.
What happens when a refrigerator is to be changed? Today the entire house comes together and says let us buy the best, let us buy the biggest refrigerator, washing machine, or a television. So I think on the premium segment we are seeing a lot of action happening.
On chip shortage, yes there is a shortage but the stocks are also trickling in. The best part is that we are not a manufacturer so it is not the case where we do not have a particular segment in stock at all. If a customer wants a particular model of a particular brand which at times may not be there and he may have to wait, but if he is open to change of the brand and the model, I think there is no problem. We will be able to tide away this crisis also.
Last year you had to deal with shipments not coming in from China, we have talked about how this is going to be a blockbuster festive season. We could see at least online sales worth about 9 billion dollars, how are you going to compete this year with the sales that are being offered by an Amazon or a Flipkart? Are you going to be as competitive?
That is not a worry anymore because yes, they do get competitive on those big days but at the end of the day there is a consumer who only comes offline, there is a consumer who goes only online and majority of the consumer toggle between the two. Yes at times they (online players) do hurt us but overall if you see in a nutshell they are always helping us to increase the market pie and that helps us a lot. So I think it is not a great worry at all. Overall, we are able to match it, the only problem comes when they are giving exclusive models where they have lead for a week when the brands give them exclusive models to launch. I think that is the only period which is a worry otherwise I think it is totally manageable.
It is also the era of super apps and now you are seeing conglomerates come out with super apps, today is talking about a B2C consumer app, Tata’s plans we already know about, Jio is headed that way. So what will happen with Vijay Sales?
If super apps succeed, then maybe a large section of the consumers will get hooked on to them and they will be open to all platforms. But at the same time, for example Swiggy is there now but you find that restaurants are also totally booked. So I think online and offline is here to stay. When Amazon and Flipkart came in, everybody thought it is the end of offline but I think offline has only grown. Anybody who is changing with the times, whether it is offline, online, hybrid model, they will survive. Somebody who gets stuck is going to be a disaster. In fact, we always thrive in competition. I always say in 2007 if other retailers would not have come in we would have not been even half the size today what we are today. I think Vijay Sales thrives in competition
