M for music, N for next

Will music help the durables retailer connect with the young?

It’s a bit of a stretch, but then Venugopal Dhoot has never hesitated taking a long shot. Last fortnight, the consumer durables-to-oil and gas giant—via its retail arm, NEXT—snapped up Bennett, Coleman & Co (which publishes the Times of India)-owned music retail chain Planet M for Rs 200 crore. The music retailer has 146 stores (half of which are owned) in around 40 cities, and had revenues of Rs 150 crore in 2006-07.

NEXT, launched in January this year, retails consumer durables and has a presence in around 180 cities. So, how does NEXT mix with Planet M? “This fits into our strategic plan to tap products and services demanded by the newage Indians.

Planet M has a huge brand equity and offers a unique opportunity for Videocon’s retail expansion in this space,” says Dhruva Chandran, CEO of NEXT.

Translated, that means NEXT wants to use Planet M to tap young consumers for the consumer electronics it vends (NEXT not just sells parent Videocon’s brands, but also those of other players). According to a FICCIPwC report, the Indian music industry is expected to grow at 30 per cent a year to touch Rs 8,700 crore in another four years.

In a bid to capture a larger share of the growing pie, NEXT intends to grow the Planet M network to 2,000 stores over the next 18 months (that’s three and a half stores a day, starting now). What, however, NEXT may need to mull over is whether music, in future, will be sold in stores at all.

The consumers it hopes to lure into its stores may increasingly buy music online. As they say, NEXT will eventually find out.