Consumer durables major Videocon [Get Quote] and Kishore Biyani's Future group have entered into an agreement to source consumer durables.

Under the agreement, Future group company, Home Solutions Retail India, will source electronics and home appliances from Videocon for their in-store brands, Sensei and Koryo.

These products, specifically meant for Home Solutions Retail, will be retailed exclusively from - E-Zone and Electronics Bazaar.

Home Solutions Retail will also give preferred vendor status to the Videocon brand. It would stock and sell all Videocon products at all its outlets.

"The tie-up covers the entire basket of Videocon's products and may also include Electrolux appliances in the future," said Manoj Kumar, head, consumer durables, Future group.

Retail analysts believe that the MoU will give more volume and higher visibility to Videocon and higher footfall and value addition in the form of a new product line for the Future group.

Earlier, Videocon was reportedly in talks with the Mukesh Ambani-promoted Reliance [Get Quote] Retail to become its sourcing partner.

Analysts said that tie-ups like these will result in better prices for consumers.

"The durables market is expanding and competition is growing with the entry of organised retail chains. It will give strategic advantage to both with the elimination of middle men and better supply chain efficiencies. Videocon can save a lot by avoiding expenditure on its retail chain," said retail analyst Susil Dungarwal.

P N Dhoot, director, Videocon Industries [Get Quote], said, "All distribution channels are equally important. But this strategic partnership acknowledges the tremendous momentum that organised retail will assume in the days to come."