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Follow UsRemember 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.
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The Agrani |
| Agrani Switch, India’s first multi-format chain of technology superstores will be opened across the country and the company plans to establish 2500 retail stores by the year 2006. Apart from the retail stores, Agrani will sell its products through catalogues and via the Internet. Services: The company will derive a major chunk of its revenue from services and value adds like warranties, after sales and AMCs (annual maintenance contracts). The company has launched Agrani Switch TechAid and is setting up centers across the country to service products sold via Agrani. Distribution: With Agrani eyeing 2500 stores, it’s entering the distribution segment with one tie-up already in the kitty. The company has tied up with Philips for a national distributorship for the cell phones. |
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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