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Nov, 08 2010

RING IN PROFITS

The overall telecom handset market is estimated to be around Rs 30,000 crore. Of this, The MobileStore (TMS) has 45 per cent market share in the organised telecom retail market. In a tête-à-tête with Amanpreet Kaur, Srikant Gokhale, CEO of The MobileStore

The overall telecom handset market is estimated to be around Rs 30,000 crore. Of this, The MobileStore (TMS) has 45 per cent market share in the organised telecom retail market. In a tête-à-tête with Amanpreet Kaur, Srikant Gokhale, CEO of The MobileStore, talks about the move to enter into franchise route to scale up business across tier II and III cities.

Give us a brief background of your company?

The MobileStore, promoted by the $15-billion Essar Group, is India's first and largest national chain of multi-brand and multi-service telecom outlet. Today, we have over 1,000 Company Owned - Company Operated stores spread across 190 cities. About a year back, we expanded our offering by entering the Rs 90,000-crore consumer durable and information technology (CDIT) retail space through the acquisition of Impact Retail, which operated large format stores under the name Xcite. Xcite has since been rebranded as The ElectronicStore and currently operates in key cities like Delhi, Gurgaon, Bangalore, Hyderabad, Pune and Ahmedabad. Through TMS and TES, we sell over 200 brands.

What type of products and services do you offer to the consumers?

The MobileStore offers telecom products like mobiles, handset accessories, mobile connections and recharges, mobile bill payments, value-added services, handset repairs and exchange, music and gaming devices and DTH, all under one roof. The ElectronicStore is a large format CDIT retail outlet, with each store north of 20,000 sq.ft. It offers over 3,000 products spread across more than 150 renowned brands to meet diverse customer needs.

What inspired you to get started with the idea of venturing into franchising?

We are keen to scale up our business by 50-60 per cent by March. The timing is right because people are spending and retail space is available at the right price, which was not the case earlier. So we have started the process of adding stores to capitalise on our leadership position and avail the first mover advantage. To fasten our expansion plans, we have decided to adopt the franchise model in tier II and III cities and towns. The model will help us add around 500-600 stores by leveraging the existing infrastructure. For owning The MobileStore franchise, the franchisee requires an area of 250- 400 sq.ft in the right catchment with a capital investment of Rs 5-10 lakh.

For managing the store operations effectively, what type of training and support will you offer to the franchisees?

We will provide franchisees with furniture and fixtures to maintain the identical look and feel of the brand across stores. The franchise model is the best way to tap growing markets in smaller towns, which is where the telecom market is now heading to. The franchisees will get the benefit of incorporating best practices that we have evolved as an organisation from our experience of running over a 1,000 TMS's successfully. Currently, we do not have any plans to expand our TES network through the franchise route.

For scaling up your business, which cities are you targeting? How many stores will you open by the end of this fiscal?

We are looking at targeting tier II and III cities and towns, which are good markets. The MobileStore is planning to add 500 outlets in the next six months.

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