Sansui to go online-only in India to boost sales

NEW DELHI: Japanese consumer goods manufacturer Sansui has decided to go online only in a big way in India and will sell its air-conditioners and certain models of televisions and refrigerators exclusively through Flipkart.

"Last month we saw a 25% decline in sales in offline stores and three-digit growth in sales through Flipkart. So we have decided to sell all air-conditioners and some models of refrigerators and televisions only online," said Amitabh Tiwari, chief operating officer (COO) of Sansui.

The move will help Sansui, which competes with Samsung Electronics and LG, to reduce the cost of distribution and sales. "Air-conditioners are seasonal products and selling them through offline stores involves huge cost. Our strategic tie-up with Flipkart will help us in cutting this cost drastically," Tiwari said.

Sansui will pass on the benefit of reduced costs to consumers by pricing products competitively on the online marketplace, which it said has phenomenal growth potential due to free delivery services and aggressive pricing.




Tiwari said online trade is not the biggest contributor to Sansui’s business yet, although this route will become important, especially for a segment such as consumer durables. Flipkart and Sansui will soon start a digital campaign to market the Japanese company’s products.

"We will use our consumer information and data to help Sansui. We will also spend heavily on a digital marketing campaign together with Sansui to retarget and remarket the exclusive products," said Amitesh Jha, vice-president, retail at Flipkart.

Consumers are increasingly looking at online marketplaces to buy products such as mobile phones and consumer durables.

According to Jha, TVs and airconditioners have both seen an over five-fold growth in sales as compared to last year.

According to the Internet and Mobile Association of India and IMRB International, consumer durables and kitchen appliances contributed Rs 3,404 crore, or 14% of the e-tailing segment of Rs 24,046 crore, at the end of December 2014. Consumer durables are the third-largest contributor to ecommerce, after mobile phones and fashion.

Online-Only a Healthy Option

That e-commerce companies are driving brick-and-mortar retailers to the wall is a fact. But what the Sansui story suggests is that there can be another aspect to this narrative: online retail can provide the elusive boost to manufacturers. Customers of spec-driven products are increasingly finding it easier — and cheaper — to opt for making purchases from their phones or computers. For those whose offline sales have been suffering, the online-only retail option cuts through the clutter of an unhelpful mixed retail model. With the right moves that include brand-building, other companies flatlining in the offline world can use the e-retail-only to increase their ‘sharpness’ in the marketplace.