Onida to try out online-only sales of refrigerators

Homegrown consumer durable player Mirc Electronics, maker of the Onida brand, is taking the online route to enter the refrigerator category.

While it has been using platforms like Amazon and Flipkart to sell LED televisions and air-conditioners, Mirc has decided to make its refrigerator sales online-only.

“We will sell our refrigerators online to begin with and, depending on the learnings and revenues, we will take a call on whether we would like to formally enter the segment,” said Vivek Saran, Head of Marketing & Sales, Mirc. “We have decided to rely on imports although we have capacity in our plants for manufacturing refrigerators.”

Onida, which has a strong brand equity in LED TVs, is trying to extend it to new categories like refrigerators. By choosing the online strategy, the company seeks to trim inventory costs and use pricing as a tool to attract consumers.

“Onida is playing safe as it enters new categories like refrigerators,” observed industry veteran YV Verma. “It is surprising that it is going online first, since it might alienate the traditional offline trade. By going online, the brand get eroded and is perceived to be more of a commodity player...using the pricing tool to garner more sales.”

Besides, the larger ticket size of refrigerators category makes it a prohibitive category for online sales, he said. “Consumer durables above ₹8,000 need the touch-and-feel element. Going online in a category with a ticket size in excess of ₹20,000 is not always feasible.”

While some foreign players have taken sales completely online, this would mark the first time that an Indian durable player is trying it for a high-ticket product.

Mirc does not want to alienate the offline trade. “We have to take care of the traditional offline trade and see to it that there is no conflict of interest as we go for online sales with our refrigerators,” said Saran.

Mirc last year began to sell its low-priced Igo brand of TVs — targeted at the rural markets — exclusively online. “Since we wanted to keep the identity of Igo separate from Onida, we chose sites like Amazon to sell Igo last year. We want to increase sales via e-commerce from the current 7-8 per cent to 10 per cent of our turnover of ₹1,000 crore,” Saran added.

However, competitors like Godrej Appliances are not too enthused about going exclusively online for a particular category. “Going online is not a sound strategy and players like Onida have been losing out in the traditional trade. It is possibly looking at an easy way to generate sales but offline will always remain a bigger channel,” observed Kamal Nandi, Business Head, Godrej Appliances.