Tata's Infiniti takes Croma to the South
Business Standard — November 19, 2007

After establishing itself in Maharashtra and Gujarat, Tata's Infiniti Retail has chalked out an aggressive expansion plan for its electronic store chain, Croma, in south India.

Croma is looking at 10-12 large format stores in the next couple of months, ranging from 10,000 sq feet to 17,000 sq feet in the main southern cities such as Chennai, Bangalore, Hyderabad, Kochi.

The company is planning to invest Rs 1.5-2.5 crore on infrastructure and another Rs 2-2.5 crore on the inventory per store, bringing the total investment to around Rs 75 crore.

The company had earlier said it will invest nearly Rs 400 crore to set up 100 stores by 2010. It plans to have 30 stores by March 2008.

"To begin with, we will not open in smaller cities. First, we will establish ourselves in big cities and then move into smaller ones to have better logistics and management,'' said Ajit Joshi, CEO, Infiniti Retail.

Infiniti will set up four stores in Bangalore and two each in Chennai and Hyderabad. The retailer will then move into smaller cities such Mysore in Karnataka and Coimbatore in Tamil Nadu.

Joshi, however, denied that Infinity plans to pick up 35 per cent stake in south-based electronic and consumer durable chain, Vivek's.

"It does not make any sense for us to buy a minority stake in players with smaller formats. It does not go with our expansion strategy," he said.

For the region, the company is giving a major thrust to the sale of information technology products and high-end durables to cater to tech-savvy consumers. The retailer plans to sell more laptops, LCD televisions, mobile handsets and music players in these cities, which house IT giants such as Infosys, Wipro, HCL, Motorola and Cisco.

The company also plans to retail all its 6000 products across eight categories, which it sells in its stores in west India.

"The south has high literacy rates. Bangalore, Hyderabad and Chennai are ruling the world in IT. All these cities are well connected to the western world and have global exposure. So, we are hopeful of selling the full range of high-end products there. Secondly, the homes there are bigger so we can also sell bigger LCDs, refrigerators and washing machines," said Joshi.

Croma plans to employ nearly 600 people for its southern operations, hiring 50 to 60 staff per store.

"We put recruitment advertisements for the past 20 days and got tremendous response. We plan to employ all of them locally," Joshi said.

The southern expansion comes at a time when other electronic retailers such as Reliance Retail's consumer durable chain Reliance Digital, Videocon's Next and Chabria's Jumbo Electronics are also expanding in the country.