Sunday, November 30, 2008
Branded chains swamp mobile retail market
It's not difficult to see what's keeping Sanjeev Mahajan, CEO, Hotspot, the mobile retail chain of Spice Corp, on his toes. In the face of stiff competition from rival retail chain brands --?Mobile Store, Subhiksha Mobile and M Bazar, to name a few?-- in the telecom products segment, he's turning aggressive to secure a leadership position for Hotspot.
So the over two-year-old chain is targeting 1,000 mobile phone and accessories' outlets under the Hotspot brand name by the end of the year. "We are opening an outlet a day and we already have 325 Hotspots in important cities," says Mahajan.
Interestingly, though, Mahajan is not the only one thinking big. Subhiksha Trading Services' Managing Director R Subramanian also intends to double his Subhiksha Mobile stores ? in the standalone format and the shop-in-shops?-- from the current 740 outlets.
"In the last one year, Subhiksha Mobile has grown much larger than the others (read rivals) not only in terms of the number of stores but also in terms of volumes as well, to become the largest telecom products retailer," claims Subramanian.
Clearly, the mobile handset market is buzzing with new branded retail chains such as Reliance and Aditya Birla Group entering the fray and the existing chains expanding their foorprint.
Take Pantaloon Retail's JV with Axiom of Dubai, for instance. The company is re-branding its standalone retail chain Mport to Axiom stores, which is among the largest telecom products chain in West Asia.
The mass market products will continue to be sold under M Bazar, its shop-in-shops at the Big Bazar outlets, while the lifestyle products will find their way into Axiom. By the end of the year, M Bazar will grow from 100 to 428 outlets, while the company will open 35 Axiom stores by then.
The lure of the telecom products market is easy to explain. India's cell phone market adds eight million subscribers every month. The replacement market is close to 55 per cent already (in Delhi, the figure is 60 per cent). A BCG research says that by 2010, India's replacement market will be 70 per cent.
Put together, the size of the handsets market is about Rs 70,000 crore (Rs 700 billion) a year. Commenting on why Pantaloon entered telecom retail, its spokesperson says: "It is a bulk volume business. The margins are made on total volumes sold."
Needless to say, the opportunity is enormous. The industry has been dominated by the unorganised players?-- nearly 500,000 mom and pop stores sell phones, recharge cards and accessories.
What's the USP of the branded chains that are rolling out nationally, compared to the neighbourhood shopkeeper stocking mobiles? "Their inventory is limited while we will stock phones priced between Rs 1,000 and Rs 50, 000," points out Mahajan of Hotspot. Besides, the branded chains promise high-quality service as they enter full-scale servicing tie-ups with different phone brands.
Hotspot hopes to beat competition by offering hi-end cameras, iPods and laptops at its 450 sq feet to 600 sq feet showrooms. This is in addition to mobile phones, memory cards, pouches and other accessories that it already stocks.
On the cards are other VAS (value-added service) products. While music videos were introduced two months ago, a full-length feature film on a chip will be the next big thing at Hotspot. "You could watch this film on your mobile screen. And the USP is that we are offering legal content," says Mahajan.
Subhiksha, meanwhile, is offering "only the lowest and best value on all handsets" at its stores. Subramanian says that the share of sale of VAS products and personal electronics in its portfolio is low "but over the next three to six months we hope to make significant progress in this direction".
Will the mom and pop stores selling phones shut shop as branded chains grow? "No. Have the 'kirana' shops closed down because of branded food chains?" asks the Pantaloon executive. "Besides many of them will become franchisee of the bigger brands," adds Mahajan.
Organised retail, which started off with a market share of less than 1 per cent two years ago, now enjoys 15 per cent share. This will swell to 40 per cent in another two to three years. Of course, once FDI in retail is cleared by the government, Sanjeev Mahajan's job could only get tougher with expert international retailers such as Crazy Jones and Eurosat setting their foot in India.
So the over two-year-old chain is targeting 1,000 mobile phone and accessories' outlets under the Hotspot brand name by the end of the year. "We are opening an outlet a day and we already have 325 Hotspots in important cities," says Mahajan.
Interestingly, though, Mahajan is not the only one thinking big. Subhiksha Trading Services' Managing Director R Subramanian also intends to double his Subhiksha Mobile stores ? in the standalone format and the shop-in-shops?-- from the current 740 outlets.
"In the last one year, Subhiksha Mobile has grown much larger than the others (read rivals) not only in terms of the number of stores but also in terms of volumes as well, to become the largest telecom products retailer," claims Subramanian.
Clearly, the mobile handset market is buzzing with new branded retail chains such as Reliance and Aditya Birla Group entering the fray and the existing chains expanding their foorprint.
Take Pantaloon Retail's JV with Axiom of Dubai, for instance. The company is re-branding its standalone retail chain Mport to Axiom stores, which is among the largest telecom products chain in West Asia.
The mass market products will continue to be sold under M Bazar, its shop-in-shops at the Big Bazar outlets, while the lifestyle products will find their way into Axiom. By the end of the year, M Bazar will grow from 100 to 428 outlets, while the company will open 35 Axiom stores by then.
The lure of the telecom products market is easy to explain. India's cell phone market adds eight million subscribers every month. The replacement market is close to 55 per cent already (in Delhi, the figure is 60 per cent). A BCG research says that by 2010, India's replacement market will be 70 per cent.
Put together, the size of the handsets market is about Rs 70,000 crore (Rs 700 billion) a year. Commenting on why Pantaloon entered telecom retail, its spokesperson says: "It is a bulk volume business. The margins are made on total volumes sold."
Needless to say, the opportunity is enormous. The industry has been dominated by the unorganised players?-- nearly 500,000 mom and pop stores sell phones, recharge cards and accessories.
What's the USP of the branded chains that are rolling out nationally, compared to the neighbourhood shopkeeper stocking mobiles? "Their inventory is limited while we will stock phones priced between Rs 1,000 and Rs 50, 000," points out Mahajan of Hotspot. Besides, the branded chains promise high-quality service as they enter full-scale servicing tie-ups with different phone brands.
Hotspot hopes to beat competition by offering hi-end cameras, iPods and laptops at its 450 sq feet to 600 sq feet showrooms. This is in addition to mobile phones, memory cards, pouches and other accessories that it already stocks.
On the cards are other VAS (value-added service) products. While music videos were introduced two months ago, a full-length feature film on a chip will be the next big thing at Hotspot. "You could watch this film on your mobile screen. And the USP is that we are offering legal content," says Mahajan.
Subhiksha, meanwhile, is offering "only the lowest and best value on all handsets" at its stores. Subramanian says that the share of sale of VAS products and personal electronics in its portfolio is low "but over the next three to six months we hope to make significant progress in this direction".
Will the mom and pop stores selling phones shut shop as branded chains grow? "No. Have the 'kirana' shops closed down because of branded food chains?" asks the Pantaloon executive. "Besides many of them will become franchisee of the bigger brands," adds Mahajan.
Organised retail, which started off with a market share of less than 1 per cent two years ago, now enjoys 15 per cent share. This will swell to 40 per cent in another two to three years. Of course, once FDI in retail is cleared by the government, Sanjeev Mahajan's job could only get tougher with expert international retailers such as Crazy Jones and Eurosat setting their foot in India.
Mobile phone retailing gets on speed dial
Competition has started hotting up in the mobile phone retailing market. Hot Spot Distribution India, a leading mobile phone and lifestyle multimedia retailer and distributor under the brand name Hot Spot, is bullish on the Indian mobile phone retail market. The company, which has set up 200 mobile retail stores in just seven months in India, is now planning to set up 1,500 stores within the next 18 months.
According to Sanjeev Mahajan, CEO, Hot Spot, “India currently sells 5 billion pieces of mobile phones every month. Indian mobile phone retailers follow the best practices in terms of customer relationship management (CRM), function on a negative working capital and are part of the community. Hence, global players should look to India in order to learn best practices of mobile retailing. It’s not the retail space but the people active in the retailing business that will spur the market growth.”
In a recent internal study conducted by Nokia, the base of mobile phone retailers in India is expected to grow from 3 lakh to 10 lakh by 2010. During the same period, mobile phone retailing market in India is expected to contribute 70% to the overall retail sector.
Mahajan further added, “Currently, we are growing at the rate of 40%. Our cluster approach in Delhi has been a leading factor in spurring more volumes.”
Similarly, Essar Telecom Retail plans to set up over 2500 stores in the next 3 years across 600 cities, thus covering virtually every major town in every state across India. Over seventy stores have already been launched and are serving customers across Mumbai, Delhi, Kolkata, Hyderabad, Chennai, Bangalore, Pune, Chandigarh and Ahmedabad.
Another 100 stores are scheduled to come within the next 6-8 weeks. The chain would be almost 600 stores strong, spanning the top 100 cities and towns, within the next 6 months.
According to Sanjeev Mahajan, CEO, Hot Spot, “India currently sells 5 billion pieces of mobile phones every month. Indian mobile phone retailers follow the best practices in terms of customer relationship management (CRM), function on a negative working capital and are part of the community. Hence, global players should look to India in order to learn best practices of mobile retailing. It’s not the retail space but the people active in the retailing business that will spur the market growth.”
In a recent internal study conducted by Nokia, the base of mobile phone retailers in India is expected to grow from 3 lakh to 10 lakh by 2010. During the same period, mobile phone retailing market in India is expected to contribute 70% to the overall retail sector.
Mahajan further added, “Currently, we are growing at the rate of 40%. Our cluster approach in Delhi has been a leading factor in spurring more volumes.”
Similarly, Essar Telecom Retail plans to set up over 2500 stores in the next 3 years across 600 cities, thus covering virtually every major town in every state across India. Over seventy stores have already been launched and are serving customers across Mumbai, Delhi, Kolkata, Hyderabad, Chennai, Bangalore, Pune, Chandigarh and Ahmedabad.
Another 100 stores are scheduled to come within the next 6-8 weeks. The chain would be almost 600 stores strong, spanning the top 100 cities and towns, within the next 6 months.
HotSpot Rolls Out 1GB SD Card with Movie
HotSpot, BK Modi’s Spice Televentures Company and a mobile handset retail chain re-defined mobile entertainment space with the launch of ‘Movie Card’.
The Movie Card launched by HotSpot is a 1-GB SD card that contains a full-fledged movie along with ringtones, wallpapers and other trivia that you can play anytime, anywhere while waiting, travelling or at leisure. The movie is playable in all mobile handsets with an SD card slot and supports both movie compression formats - MP4 and 3gp. The new Movie Card will be available at all HotSpot mobile retail stores across the country at an introductory price of Rs 350/-. The present repertoire of movies offered includes Bollywood hits like Namaste London, Om Shanti Om, Lage Raho Munnabhai, Omkara and Devdas.
Speaking on the launch, Sanjeev Mahajan, CEO, HotSpot said, “It has been our constant endeavour to provide innovative products and services offering to our consumers. Given the fact that 30~40 % of mobile handsets in the country support various movie formats but there are no options for a legal shareable format for movies, we expect this segment to grow rapidly. This is just the first phase of launch of the product in the Indian market and we soon will introduce more than 50 movies on this medium by December 2009.”
Speaking on the thought behind the product, Mahajan said, “The product is based on the consumer insight for personal entertainment needs. Given a population of roughly 1.25 billion and a teledensity of 28 per cent, mobile handset-screen is the most prevalent screen today. An estimated 35 million Indians are currently using mobile phones and this figure is constantly on the rise. Foreseeing the huge unexplored market, we decided to tap into this medium and provide an entertainment option to our consumers that will be available with them 24x7”.
The Movie Card launched by HotSpot is a 1-GB SD card that contains a full-fledged movie along with ringtones, wallpapers and other trivia that you can play anytime, anywhere while waiting, travelling or at leisure. The movie is playable in all mobile handsets with an SD card slot and supports both movie compression formats - MP4 and 3gp. The new Movie Card will be available at all HotSpot mobile retail stores across the country at an introductory price of Rs 350/-. The present repertoire of movies offered includes Bollywood hits like Namaste London, Om Shanti Om, Lage Raho Munnabhai, Omkara and Devdas.
Speaking on the launch, Sanjeev Mahajan, CEO, HotSpot said, “It has been our constant endeavour to provide innovative products and services offering to our consumers. Given the fact that 30~40 % of mobile handsets in the country support various movie formats but there are no options for a legal shareable format for movies, we expect this segment to grow rapidly. This is just the first phase of launch of the product in the Indian market and we soon will introduce more than 50 movies on this medium by December 2009.”
Speaking on the thought behind the product, Mahajan said, “The product is based on the consumer insight for personal entertainment needs. Given a population of roughly 1.25 billion and a teledensity of 28 per cent, mobile handset-screen is the most prevalent screen today. An estimated 35 million Indians are currently using mobile phones and this figure is constantly on the rise. Foreseeing the huge unexplored market, we decided to tap into this medium and provide an entertainment option to our consumers that will be available with them 24x7”.
HotSpot Introduces India’s First Movie Card
HotSpot has launched what it claims is India’s first 'Movie Card' -- a 1 GB SD card that contains a full-fledged movie along with ringtones, wallpapers and other trivia that you can play anytime, anywhere while waiting, travelling or at leisure. The movie is playable in all mobile handsets with an SD card slot and supports both movie compression formats - MP4 and 3gp.
The present repertoire of movies offered includes Bollywood hits like Namaste London, Om Shanti Om, Lage Raho Munnabhai, Omkara and Devdas.Speaking on the launch, Sanjeev Mahajan, CEO, HotSpot, said, “Given the fact that 30-40 per cent of mobile handsets in the country support various movie formats but there are no options for a legal shareable format for movies, we expect this segment to grow rapidly. This is just the first phase of launch of the product in the Indian market, and we will soon introduce more than 50 movies on this medium by December 2009.”While speaking on the viability of the Movie Card, Mahajan said, “We are not competing with television, PC or the big screen at the theatre. All these mediums serve a specific purpose and are based on certain need-want conditions. The movie card serves to entertain the consumer on the move and is an extension of movie players now converging on mobile handset screen. We are going to complement the existing mediums with plans to lead the industry with more and more innovative products.”The new Movie Card will be available at all HotSpot mobile retail stores across the country at an introductory price of Rs 350.
The present repertoire of movies offered includes Bollywood hits like Namaste London, Om Shanti Om, Lage Raho Munnabhai, Omkara and Devdas.Speaking on the launch, Sanjeev Mahajan, CEO, HotSpot, said, “Given the fact that 30-40 per cent of mobile handsets in the country support various movie formats but there are no options for a legal shareable format for movies, we expect this segment to grow rapidly. This is just the first phase of launch of the product in the Indian market, and we will soon introduce more than 50 movies on this medium by December 2009.”While speaking on the viability of the Movie Card, Mahajan said, “We are not competing with television, PC or the big screen at the theatre. All these mediums serve a specific purpose and are based on certain need-want conditions. The movie card serves to entertain the consumer on the move and is an extension of movie players now converging on mobile handset screen. We are going to complement the existing mediums with plans to lead the industry with more and more innovative products.”The new Movie Card will be available at all HotSpot mobile retail stores across the country at an introductory price of Rs 350.
Speciality mobile stores set to multiply
If you are a consumer, nothing succeeds like excess. With an explosive boom in mobile phones, companies in the industry are setting up or expanding their own specialist retail chains involving thousands of planned new stores that would make it easier or cheaper for you to shop for handsets, accessories or recharge services.And most certainly, you will also have a great deal of variety from which to choose – right in your neighbourhood – besides the promise of efficient service.Leading mobile labels are aiming to catch and grow more consumers in a market that already has 250 million subscribers, and the new stores would obviously be a notch or two above local stores where a handset or coupon is loosely sold like an electronic good.“The overall mobile retail market in India is estimated between Rs 70,000 and Rs 75,000 crore,” Pankaj Mohindroo, National President of the Indian Cellular Association, said.Spice group-owned chain Hot Spot offers mobile phones and accessories across its 310 company owned stores in 29 cities across India. The company has plans to increase the number of stores three-fold to about 1,000 stores by the year-end. It also plans to increase the number of its service centres from 75 to 500 by the end of 2008.“The USP (unique selling proposition) of Hot Spot over other retail chains is the availability of products and services,” said Sanjeev Mahajan, CEO, Hot Spot Retail. The chain offers an additional one-year warranty on handsets it sells and buyers can go in for a service coverage pack that entitles them for repair even if the handset gets water logged. Mahajan said that the retail chain is looking at setting up 85 franchisee-owned collection points where users can deposit their faulty handsets for repair. The company also plans to introduce its own private label of accessories. RPG Cellucom, the mobile retail arm of RPG Enterprises, has a presence across 16 cities through 165 outlets. The company has plans to invest about Rs 400 to Rs 500 crore in the current financial year to have a total of 500 stores. The retail chain goes beyond cellphones. “We sell products such as personal digital assistants, laptops, accessories and even recharge coupons that enhance mobility,” said Biswajeet, Head of Marketing, RPG Cellucom. The chain is also considering opening its own service centres and is in talks with companies like Nokia for partnerships.Subhiksha Mobile, a unit of the supermarket chain of the same name, present across 100 cities, offers the lowest prices on all mobile handsets. "We also offer the customer the added advantage of having a Subhiksha Mobile store within a one km radius anywhere in the city,” said Mohit Khattar, President, Subhiksha Trading.MobileNxt, which offers guaranteed exchange of handsets, plans to invest about Rs 100 crore over the next two years to increase the number of stores to 500 from the existing 52, said Vijay Menon, CEO of the retail chain. The company also gives out a low-end cellphone as a temporary substitute to a user who may have deposited his device for servicing.
Hot Spot appoints OMS as media agency
OMS (Optimum Media Solutions), the specialist media independent division of Mudra Group, has been appointed the media agency for telecom retailing chain – Hot Spot. The scope of work includes media planning, buying and implementation and the size of the account is estimated to be about Rs 18 crores. Sanjeev Mahajan, CEO, Hot Spot, said, "Hot Spot retail currently has approx 300 stores across the country which we intend to take up to 1500 stores by year-end. Given our aggressive expansion and growth plans, we felt the need to partner with an agency which shared our passion and brought value to the table when it came to innovative thinking and a strategic direction."Sanjeev Mahajan adds, "The Indian consumer needs a better shopping experience in mobile retailing. A mobile phone is something that everybody wants to own today, and while working on this concept, we want the customers to have a wide range of choices before him through our retail stores. We are targeting specific communities as we want to be in every major town and every major market, the idea is to give the consumer a shopping experience in his own area." Bipin Narang, Vice-president, Marketing, Hot Spot, said, "The marketing plans right now are largely focused on the expansion plans. The consumer today will not walk a long distance to buy the airtime solutions or a handset. The idea behind the expansion is to open a store near the consumer, while offering not just the mobile handset, but all kinds of accessories, including data cards, Bluetooth accessories, airtime solutions and products connected with the mobility arena like MP3, X-Boxes, laptops or anything that enhances the mobility of the person." Chandradeep Mitra, President, OMS, said "It feels wonderful when clients see media agencies as partners, rather than vendors. Hot Spot has aggressive expansion plans and it will be our endeavor to derive maximum bang for the buck in reaching audiences in newer markets."Added Niti Kumar, Business director and Head of Delhi branch, "Mass media will play a critical role in Hot Spot's marketing plans, and we're currently in the process of devising unique solutions to tap the diverse markets that the brand is entering."
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