When Sathish Babu chucked his job as sales head, Karnataka at Eureka Forbes to form UniverCell in 1997, little did he realise that he was sowing the seeds of the mobile retail revolution. Today , his company clocks a turnover of Rs 600 crore.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.UniverCell aims to ramp up to 300 stores by March 2009 and touch 1,000 stores by 2010 with backing from Peepul Capital LLC, which is investing Rs 100 crore to fund the expansion . “Not many people have gone beyond South India and succeeded in retail. We want to break that,” says Babu confidently. Apart from expansion, brand building is high on the agenda. Sangeetha has recently appointed brand consulting company Vertebrand to plan its marketing activities . Besides print, television and outdoor campaigns, Big C uses rural vans to campaign in smaller towns and cinema to air its commercial. UniverCell signed up with Madhavan last year as its brand ambassador . Global Access, moving away from print media and hoardings, is focussing more on BTL activations like roadshows , SMS marketing and email. In-store promotions and co-branding activities with the major handset players are a regular (See Box: Caller Tunes). Retailers insist the offers are not always about low price. Babu of UniverCell, for instance , says the company’s handsets are priced higher than that of Subhiksha. “The cell phone purchase is an evolved decision and the pricing need not be the lowest,” he says. Chowdary of Big C adds that the brand’s service has been one of its big differentiators till date: “Sixty per cent of our customers are repeat customers. We want to make every customer a Big C brand ambassador.” Besides product training by vendors, the chains have an in-house training system. UniverCell has a 25-day training programme for freshers, which includes 10 days of training with a senior salesman on the shop floor. Big C conducts a one month ‘new showroom’ programme to ensure its new outlets start performing from day one. “I have the finance and supply in place to open as many as 10 showrooms every month. But a right team is required for the store to start performing from day one,” Chowdary says. Sangeetha, for its part, has recently hired a training consultant , who’s worked with companies like Nokia, CCD and Tanishq. “There is a big gap between the quality of manpower seen in India and overseas. We are trying to bridge that gap,” says Chandra. The jury is still out on whether traditional chains can fight the onslaught of the national players. The latter have better brand recall, better economies of scale and bargaining power with vendors. They also have deep pockets, which means they can afford to bleed for a few years before turning profitable. But it will be difficult for national players to break into the traditional strongholds of the regional players — UniverCell is dominant in Tamil Nadu, Sangeetha in Karnataka and Big C in Andhra Pradesh. “They are significant players within their region of operation,” says Sunil Dutt, country head - mobile business, Samsung. UniverCell says it contributes 20-25 % to Nokia’s sales in the areas it operates in. Sangeetha is estimated to contribute 20% of Motorola sales in Bangalore. Global Access doubles up as a distributor for Sony Ericsson and supplies the handsets to 700 retailers in Bangalore. “We know the local market much better and can quickly react to market need,” insists Babu. “If price drops the change is reflected within two hours in our stores. Big companies wait for 2-3 days.” Siraj Fulara of Global Access believes it’s difficult for national players to maintain consistent standards across stores. “Unlike the larger players, we are constantly in touch with customers and personally involved in the operations of our outlets ,” Fulara says, adding that one reason Global Access hasn’t moved out of Bangalore is the fear that it would dilute the equity and level of services.Spot Market As in other formats, the cardinal mantra of retail applies to mobile retailers as well - location, location and location. “If you’re just 200 metres out of the market you will flop. About 70% of battle is won if location is right,” says Siraj Fulara of Global Access , adding that the company deferred its decision to set up shop in Bangalore’s Indiranagar because it couldn’t get the location right. Subhash Chandra of Sangeetha admits that the company has made a few mistakes in terms of store selections but it has “grown wiser” . UniverCell , for its part, does a review of its new stores every six to nine months. And besides large cities, the retailers also smell an opportunity in the smaller towns. Sangeetha will enter tier II cities like Vijaywada in AP and Hubli in Karnataka in 3-4 months, while UniverCell is eyeing towns with a population of less than 50K. To make the rural foray viable , analysts believe that franchisee model has to be followed by these players . And players like Sangeetha are going the franchisee route. In future, Chandra says about 30% of its outlets will be franchisee owned. Sathish Babu says lack of proper infrastructure , zero broadband connectivity , inadequate banking facilities and the threat of theft are some of biggest problems the company faces in the smaller towns. For example, it may take two extra days for the stock to reach these places, he says.In a year-long scheme, Sangeetha tied up with movie rental company Seventymm, wherein customers could rent out a specified number of DVDs free. It is in talks with a London-based insurance company to offer insurance to customers. Incidentally, Sangeetha had introduced insurance schemes in 1998 but they were discontinued as insurers backed out citing high number of fraudulent claims. Sangeetha was also the pioneer of EMI schemes, in tie-ups with StanChart and Citibank. Big C has launched a Rs 1 crore promotion offer where consumers can win ACs, iPods and other gizmos, and one lucky winner gets to drive home a Mercedes Benz. Big C also has special season offers like giving away crackers worth Rs 1,000 to every handset buyer during Diwali. “There is a 200% growth in our sales during the week,” says Chowdary of Big C. UniverCell introduced an SMS short code facility last year wherein customers can type in a model number and get instant updates about the phone’s features. It also provides online shopping facility. The chain is now gearing up to launch its Tamil website and will keep adding regional language websites in the future. Sangeetha plans to sell navigation software jointly with a Hyderabad-based IT company and is in talks with OOH Media to install LCD screens in its showrooms.