Now, biggies rush to set up mobile retail chains

Organised mobile retailing is set to become talk of the town with big corporate houses chalking out aggressive plans to tap over Rs 70,000 crore market. Two diversified business conglomerates — Essar and Spice Group — had recently announced combined investment plans of about Rs 1,850 crore to set up pan India mobile retail chains. Even hypermarket chains like Subhiksha have started exclusive stores for mobile retail — Subhiksha Mobile and Big Bazaar with M Bazaar. The companies are getting a boost with the fact that the mobile users are expected to cross 220 million by this year-end and 500 million by 2010 with additions of about six million subscribers every month. The retail market for mobile phones — handsets, accessories and airtime — is already over Rs 70,000 crore market growing at the rate of 15-20%. Earlier this year, even the market leader Nokia reworked its 10-year alliance with its distribution partner HCL Infosystems, which has led to Nokia venturing into direct distribution and sales. The multi-service outlets by the companies would offer end customers not just mobile handsets but also mobile accessories, new connections, value added services, after sales support and electronic products such as digital cameras, iPods and other gaming devices. “With about seven-nine new mobile models being introduced every month, there is a huge opportunity for the mobile retail market of $16 billion,” Hot Spot Retails Pvt Ltd vice chairman Dilip Modi said. Spice Group has announced an investment of Rs 500 crore in the next two years in its telecom retail venture — Hot Spot Retail. Essar Group, which recently agreed to partner with Vodafone Group over a stake in Hutch-Essar, will pump in Rs 1,125 to Rs 1,350 crore over the next three years in its telecom retail venture and is expecting revenues to the tune of Rs 5,000 crore. “We will invest $250-300 million over the next three years to set up 2,500 The MobileStore outlets across the country,” Essar Telecom Retail CEO Rajiv Agarwal said. Modi said, “We are planning to take the number of our Hot Spots to 400 by the end of this year and 1,500 by 2008-end. “It has already set up 50 such outlets in Delhi and these retail chains will be the window to the telecom customers in India,” adds Modi. “We are expecting revenues to the tune of Rs 800 crore in the next fiscal from Rs 200 crore currently,” he said, adding, “we would introduce the touch and feel demonstration for our customers rather than traditional way of purchasing mobile just by looking at the dummy model.” Essar currently has 60 Mobile-Store across India, including 21 in Delhi. “We are also looking at opening up of 4,000 touch points in the form of stores, kiosks and shop-inshops,” Agarwal added. PTI

Courtesy: EconomicTimes
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