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    Ringing the Bell Profitably

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    Headquartered in Bengaluru, is a well-recognised multi-brand retailer of mobile handsets in south India. Started in 1999, it is also the first company to offer a broad range of related services including insurance, EMI and exchange schemes, doorstep service and exclusive Android-based applications. Quality products and innovative retail solutions have enabled it to ring the right bell with the customers and establish a stronghold in the southern region of the Indian market. With nearly 200 stores across Karnataka, Tamil Nadu, Andhra Pradesh and Puducherry, has become a Rs 500-crore entity today that is constantly scaling up the growth curve. Now set to become a nationwide chain, it has already begun to expand its footprints in northern and western India via a mix ownership and franchise business model.

    The Origin

    Sangeetha Mobiles Private Limited was born out of a modest business venture started by L.P. Narayana Reddy and his friends. Little did they know while opening a music shop named Sangeetha, selling Gramophone records at JC Road in 1974, that it would turn out to be a multi-crore enterprise. Dealing with a single product for years, events took a turn for good when the television wave hit India during 1980s. At that time, L. , the company’s present Managing Director, joined Sangeetha and provided a new vision to the trade, thus scripting a great retail story. Under his leadership, the business portfolio was diversified to other categories, such as home appliances, TV sets, computers, et cetera with much success. In later years, when the mobile communications market in India took rooting, seeing a huge potential in this segment, in 1999, the company decided to do away with everything else and focus only on selling mobile handsets.

    The Challenges

    Remembering the initial days of business, Chandra says that these days we are in an ocean of mobile phones, but when Sangeetha Mobiles entered the market, the scenario was quite different and difficult. He tells, “When the mobile market opened in Karnataka in 1996, the entire focus used to be on selling sim cards only, as it offered meaty margin. It was difficult to sell a mobile handset in those days as no mobile company had an office in India.” Moreover, obtaining a mobile with the bill required sending an advance demand draft and wait for a week or 10 days to get the delivery. As cumbersome as it seemed, not many retailers were interested to follow the route. Sangeetha took the risk and started providing a mobile with a bill and guarantee.

    The Growth Curve

    After three years into the operations, the company contemplated branching out and became the franchise for Hutch. It opened the Hutch shop, which had established their first setup in Bengaluru. It has grown manifold since then and currently has around 200 showrooms in Karnataka, Andhra Pradesh, Tamil Nadu and Puducherry, out of which 115 plus outlets are in Karnataka alone. The retailer employs over 1,000 people. Aiming a pan India footprint, it has already launched operations in the northern region and its current store count has risen to 225 covering an area of approximately 600 sq. ft per location. To spearhead the growth, in addition to company-owned stores, it has also opted for the franchise business model.

    The USP

    Sangeetha is continually expanding its business not only in terms of the number of stores and markets but also brand portfolio and related services. Besides pioneering the handsets retail, it is the also the first seller to offer insurance, EMI and exchange schemes, doorstep service and exclusive Android-based applications.

    The company rolled out another unique service almost three years back called Sangeetha Delight, which is available across five key cities such as Delhi, Mumbai, Chennai, Hyderabad and Bengaluru. The service gives customers the luxury of having their defective phone picked up from the comfort of their home or office, providing them a stand-by phone and delivering their handset at their place after fixing the problem at the service centre. This facility is available for unlimited number of times in a year for a very nominal one-time fee of Rs 99 only.

    Brands and Product Bouquet

    At the chain’s stores, a customer can expect to buy a wide array of products including  mobiles, smart phones, tablets, related accessories and operator services. It has handsets of all leading local or foreign phone brands. Its brand bouquet comprises international brands like Apple, Samsung, Nokia, Sony, HTC, LG, , HCL, Lenovo, et cetera, and Indian brands such as Micromax, Karbonn, Celkon, Gionee, Penta,  XOLO, to name a few.

    In course of developing the business, Sangeetha has also launched its own brand called ‘Wham!’, which offers an assortment of smart phones, feature phones, tablets and accessories.

    Business and Clientele

    The suitable store locations for Sangeetha are malls and high streets and it has chosen to steer clear from shop-in-shop format. Not much humdrum is needed for day-to-day operations and each store requires to be manned by 4 to 5 employees only. However, the new employees have to undergo an induction program conducted by the company’s learning and development team comprising six man-days of on-job training. In addition, the associated brands also provide trainings on regular basis to update their know-how about current products and new launches. Such initiatives ensure smooth operations and greater customer satisfaction resulting in increased sales and revenue.

    As the chain specialises in smart phones, it attracts customers who are smart phone users belonging to the age group varying from college students to senior citizens. At Sangeetha’s stores, the products are usually priced between Rs 999 and Rs 55,000. Also, the top performing brands in terms of sales are Samsung, Nokia, Sony, Micromax, and Karbonn. Notably, as per the company data, it’s total per square feet sales have been increasing by Rs 40,000.

    Marketing and Branding

    The company not only maintains a massive data base of its customers but also makes sure to touch base with them on regular basis to inform them about the latest models and offerings through SMS, e-mailers, et cetera. Every quarter, it carries a campaign offering genuine service and the most attractive incentives.

    For strong branding, the company has leveraged on the Indian people’s passion for cricket and has successfully utilised the opportunity to enhance brand visibility at several international cricket matches. Besides, Sangeetha also had a team in Karnataka Premier League, popularly known as ‘Mantri KPL’. Its franchise name is ‘Belgavi Panthers’.

    Customer Loyalty

    Sangeetha Mobiles boasts of a strong customer base of around seven million happy customers. “We are not in the telecom business serving people. We are in people business providing telecom solutions and strongly believe in CARE (Customers Are Really Everything),” states Chandra.

    Winning customer loyalty is not a one-time affair; it needs constant effort. The company’s one such initiative is its anniversary sale called ‘It’s On’ organised on its founding day May 31, which continues until June 30. It’s a huge draw among the customers. Moreover, ‘Zero is Hero’, an EMI offer in September across all phone brands, is the most awaited event in mobile retailing space in southern India. All mobiles are sold at Rs 1 margin and every customer gets an assured gift on the spot plus a whole of bundled offers like free data, talk time, et cetera. The offer ensures that the company is able to triple its sale.

    The Way Forward

    The company sales have been growing year on year and by March 2014, it is expected to touch the Rs 1,000 crore mark. Though its retail network in the southern market has mostly CoCo stores, but to fuel the development across other parts of the country, the company has opted for the franchise route. It has already opened some franchise stores in Delhi and Uttar Pradesh. The company is also mulling to support its further growth through private equity and may look at the (FDI) channel. Sharing Sangeetha’s expansion strategy, Chandra says, “We look forward to expand to East, West and North of the country with multi-unit franchisee model. In the next 12 months, we plan to roll out 100 plus stores under CoCo model along with another 100 outlets via franchisees.” 

     

                                                                                                 Details of five top performing stores  
    Store

    Catchment of customers Sales Growth YoY

    D S O

    Total Area

    Rental/Month Revenue Share in Rs

    Average Monthly Sales in Crore

    Average Bill Size

    Average Footfalls per Day/Month

    Velocity-sales/sq-ft/day

    Sales Growth YoY

    Forum, KoramangalaWorking class, students“04

    1500

          
    sq. ft2.5 lakh2

    1800

    90/2700

    50

    5%


      
    , MalleswaramDitto“09

    750 sq. ft

    1.0 lakh

    1

    650

    50/1500

    20

    10%

    CMH, IndiranagarDitto“03

    800 sq. ft

    2 lakh

    2

    2000

    80/2400

    60

    5%

    MarathalliDitto“08

    1500 sq. ft

    1.2 lakh

    1.5

    1500

    60/1800

    40

    10%

    HimayathnagarDitto“10

    750 sq.

    ft

    0.8 lakhs

    1.3

    1450

    80/2400

    50

    10%