univercell logo

The same year, Sangeetha, a family-owned company dealing in consumer durables, started offering mobile handsets in their showrooms . Buoyed by the initial success, the company stopped dealing in anything other than mobiles by 1999. It clocked a turnover of Rs 300 crore in FY08.

It is by now well documented that the advent of mobile telephony and the subsequent liberalisation of the sector has propelled India to one of the fastest growing mobile markets on the planet. But what the growth of the sector has also done is fuel the entrepreneurial fire among ordinary men who have seized the opportunity and succeeded.

The initial years were challenging, of course. The grey market ruled the roost and customers were hesitant to pay more for service and a shopping experience with ‘bill & warranty’ . But the rise of modern trade gave a fillip and enabled these players to ride the initial turbulence. According to Naveen Mishra, manager - communications research , IDC India, customers’ expectations of experience and service has gone up multifold in the past few years; hence traditional players have gained a clear edge over the grey market and mom-and-pop shops.

Sangeetha operated two stores until 2002 but has grown to 47 outlets across cities like Bangalore, Chennai, Hyderabad, Mangalore, Mysore and Vishakapatnam. UniverCell, which had only ten showrooms till May 07, has added another 160 across South India. Global Access, started by Siraj and Mohsin Fulara, has about 20 stores in Bangalore and Balu Chowdary’s Big C has 48 showrooms across Andhra Pradesh and Karnataka.

Global Access clocked a turnover of Rs 98 crore last fiscal and expects to touch Rs 160 crore in fiscal 08-09 . Big C expects turnover to swell to Rs 300 crore from Rs 200 crore last fiscal.

The entry of corporate backed mobile retailers like The MobileStore and Hot Spot and their aggressive expansion has compelled the traditional chains to step out of their comfort zone. Subhash Chandra, MD, Sangeetha Mobiles, admits that competition has taken them by surprise.

He says his chain was the No 1 mobile retailer until 2005 but has lost out since. “We come from a conservative background,” says Chandra. “But not expanding rapidly between 1997 and 2002 was our biggest blunder. We would have been the biggest in the country by now.” Adds Babu of UniverCell: “If you have to grow in retail you have to scale up fast, else get marginalised.”

To make up for lost time, these players have firmed up their expansion plans across India. Sangeetha is in talks with investment bankers like Edelweiss and PwC for funding. It aims to reach 100 outlets by year-end . Big C plans to double the number of its outlets to 100 by March 2009 from 48 currently but has no plans to tap private equity for at least another year.

Read more …