The Middlemen

Subhiksha

Subhiksha is India's largest chain of retail stores which houses everything from food items to mobile phones. Currently, it has 500 stores and a target of reaching 1,000 outlets by the end of this year. Recently, the company announced investments of Rs 300 crore toward its retail business. The advantage of this group is that it has a pan-India presence and has been successful throughout the year as a neighborhood discount store. Unlike other retails, the strategy of this group is to have more number of outlets, of small capacities, in order to reach everyone.

Pantaloon

Pantaloon already has a foot in the mobile retail door through ConvergeM, a chain of over fifty mobile kiosks that sit inside its Big Bazaar hypermarkets. The product basket offers everything from airtime recharges, mobile accessories, swanky brands in mobile phones, landline instruments, blue tooth accessories, fashionable mobile trinkets and much more. ConvergeM Retail plans to follow a three-pronged strategy. Shop in shop with their Big Bazaar stores, independent brand stores, and kiosks in malls, multiplexes and the metro catering to impulse buying, under three brand names M Bazaar, M Port and Gen M respectively. Recently it has struck a deal with Axiom Telecom of Dubai to expand its existing mobile retail business.

HotSpot

This retail store from the Essar group currently has 100 stores in India. It endorses almost all handset vendors including the group's own product, Spice mobiles. This group is looking at opening 1,500 mobile retail outlets, named Hotspots, over the next two years. The company already has tie-ups with all operators to sell talk time and connections on Spice branded handsets imported from China and Taiwan. The Group has announced an investment of Rs 500 crore in the next two years in its telecom retail venture.

More Ways than One
There are a lot of other means to do this business than only through the distributors or retailers. Along with action on the urban retail front, mobile handset manufacturers like Motorola are also attempting to make in-roads into the rural parts of the country through tie-ups with the likes of ITC's e-choupals and DCM Shriram's Hariyali Kisaan Bazaar, a chain of rural utility marts for sale and distribution of their handsets. These stores mainly cater to the needs of rural people. "For rural areas, one has to set up a viable model by piggy-backing on the existing distribution model where focus would be on cross player tie-ups, use of existing channels like the postal department, public distribution system and others," says James V Abraham, VP and director, The Boston Consulting Group, India. According to Payal Gaba, head, Marketing, Spice India, "We are in talks with the postal department to sell our products through them." Some handset manufacturers are also in talks with local co-operative banks in villages to sell their products to the village folks.

Future Perfect
India offers an unprecedented opportunity for telecom service operators, infrastructure vendors, manufacturers, distributors, retailers, and associated services companies. Not to be left behind, Indian cellular operators have lined up investments of about $20 bn over the next two years to bring over 80% of the population under mobile coverage. The planned investment for the next couple of years is 50% higher than it has been in the last 12 years. And all this spell more activities on the telecom front, a 'chappa chappa' approach (or 'match box') is not far from reach as long as the stake holders of the industry-service providers, manufacturers, distributors, and the regulators-work in tandem.

Gyana Ranjan Swain
gyanas@cybermedia.co.in