Retailing TIME

Remember the excitement when the first ‘super-markets’ hit Indian shores?

For the harried Indian con sumer given to rushing from shop to shop for his

purchases, shopping under one roof was a welcome change. The only deterrent in

this superlative shopping experience was the price factor and that only branded

goods were available.

It could well be the same with the first organized effort to retail Telecom,

Information Technology, Media and Entertainment (TIME) products such as GSM

handsets, basic handsets and related services, ISP services, cable modems, PCs,

laptops and printers in India.

The Agrani Switch stores are being established by Agrani Convergence Limited

(ACL) and promoted by Subhash Chandra’s Essel group. The big questions — is

the Indian TIME retail segment mature enough to warrant a viable business model?

Says ACL CEO Pankaj Mahindroo confidently, "With a network of 2,500 retail

outlets we hope to reach a target of Rs 900 crore by 2006." A tall order

indeed considering that the current turnover is less that Rs 15 crore. Counters

Mahindroo, "Most of the products we sell are fairly high priced items.

Also, given the expected reach of these products we can surely meet our

target."

Comments Manpreet Singh, CEO, Multiple Zones India, "It is not a good

strategy to retail products for some TIME segments like IT retail."

According to Singh, unlike in the US where the consumers are looking out for a

second time buy, the Indian market is very different. PC prices are still on the

higher side and the neighborhood retailer would still have the price advantages

against the branded products sold by stores like Agrani.

Also on the corporate side, managers are looking for more than just a

technology store.

While it faces challenges from the local resellers turned service providers,

the company has the advantage of a bigger national brand to take on the smaller

players. Also, given that the penetration of mobile phones is on the rise, there

will be gains made in the sale of telecom components. Since telecom products are

quickly becoming commoditized, this will blend well with the retail segment

strategy. Under the ME segment, the company will be selling multi-media

software, training on multi-media packages, magazines and dot com services.

Under the entertainment segment, the company markets games, music CDs, gaming

stations and devices, digital photo cameras and software, webcams and satellite

radios among others. For any digital media selling, the company will also have

to tackle the problem of piracy.

Moreover given the low penetration and lower demand of PDAs and digital

cameras, it will be some time before people put these on their priority list.

Counters Mahindroo, "TIME retailing has never caught up in India . We are

sure to set a trend in retailing and meet the said targets."

The company has already set up 12 stores across the country including cities

like Ahmedabad, Jaipur and Kanpur. ACL is looking at both the ownership as well

as franchisee models and plans to invest to Rs100-110 crore to set up its 70-80

owned stores target of the overall 2500 stores and Rs 900 crore revenue.

However, it remains to be seen whether TIME retailing will mature enough to

warrant high stakes.

Yograj Verma In New Delhi