India may have been adding 8 to 10 million of new mobile users every month but when it comes to business, mobile retail remains a low margin business, according to Rajiv Agarwal, CEO and director, The MobileStore. “Being a low margin business, we need to ensure the high repetition of users. 35 per cent of the customers in The MobileStore are repeat,” said Agarwal. He was speaking at PetroTech-2009 in the national capital, organised by Federation of Indian Chambers of Commerce and industry (FICCI).
Speaking about the manpower, Agarwal said that workforce employed in the business of mobile retail need to be skilled, especially the front end staff required to have product knowledge as they sell technology.
The mobile retail arm of Essar Group deals in handsets, connections, mobile accessories, repair and services. Being a multibrand and multiservice mobile retail chain, the company currently operates 1,350 outlets in 200 cities across India.
The company that has not adopted franchisee model of expansion till date, currently employs 4,500 people and with the expansion target of 3,000 stores by the end of 2010, the company is looking to add substantial workforce, said Agarwal to IndiaRetailing in the sidelines of PetroTech-2009.
With an average price of Rs 5,000 per handset, the company targets the creamy segment of the market, said Agarwal.
According to Agarwal, India with over 30,000 mobile retailers of varying size and shape has a market size Rs 250 billion and is expected to grow at 30 per cent CAGR. The total investment of Rs 346 billion is expected in the sector by 2012, added Agarwal.
Discussing about the advertising strategy, Agarwal said, “The company has adopted a joint promotion model of advertising with Samsung, Motorola and other major players, which helps boost our branding and thereby shrinks the advertising cost.” Earlier, the company in its below the line (BTL) advertising compaign, used a custom branded Rolls Royce with The MobileStore graphics and other branding; this then travelled 25,000 km across the country. The campaign was a huge hit as prospective customers were able to sit in this uniquely designed Rolls Royce, an experience of a lifetime for many, informed Agarwal.
Further, Agarwal also highlighted the cross-advertising model that is earning considerable amount of revenue for the company. Under the model, the chain allows major players in the industry to advertise within The MobileStore outlet. In the next model of advertising – digital screen advertising, the company has installed over 600 screens within its different outlets where it displays advertisements.
— Shailesh Shah