Philips Plans To Double Distribution Outlets

New Delhi: | Updated: Nov 10 2003, 05:30am hrs
Philips India is taking a hard look at its sales and distribution set-up with the intention of revamping it. Currently, Philips has a network of 108 distributors and is present in 5,000 of the 34,000 consumer electronics outlets across the country. This works out to a mere 17 per cent penetration. Philips plans to set this right by doubling the number of outlets it is present in over the next six to eight months.

At present, our distribution in most towns is weak and is limited to 17 per cent of outlets only. It is critical to make the brand more easily available across the country, says Philips vice-president, consumer electronics D Shivakumar.

Besides multi-brand outlets, Philips has 17 exclusive stores called Philips Arenas. The company is also studying the feasibility of expanding this network.

Talking about Diwali sales, Mr Shivakumar says,The Diwali season has been good. Actual secondary sales would be available only by the month-end, but sales have been beyond expectations and there has been both topline and bottomline growth. Till September our market share in CTVs was seven per cent and audios 51 per cent.

This, the company feels, will contribute to a 30-40 per cent growth for the consumer electronics division in H2 over H1 this year, when the divisions share of total profits had shrunk to one per cent.

Its areas of focus will be: upgradation of screen size and technology (Plasma, LCDs etc) in the urban segment; 14 to 20 inch segment besides audios and radio in the semi-urban and rural areas. It is working on special designs for TVs and radios for the rural market which do not need over-engineered products.

In the audio segment, Philips faces the challenge of upgrading consumers by engineering a shift from the unorganised sector, despite the steep price differential of almost 50 per cent. For this it is working on new initiatives like easier credit facilities and aggressive advertising. It has just launched a 40-city hoarding campaign.