The Mobile store franchisee and E commerce

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‘The Mobile store’ is leading retail chain in Mobile retailing. The Mobile store is Essar group company. It’s current architect is Alok Gupta. Before him its CEO was Himanshu Chakrawarti.

It has been pioneer of starting various initiatives and has remarkable tie ups with  Airtel, Hypermart, Shopper’s stop, Big Bazar to name a few. It has been at more than 2000 touch points all across India at one or another point of time.

E commerce boom has been futile for organized trade. Brick n mortar stores were most affected and impact was high and demolishing on bigger retail chains. Downsizing was in routine and became trend. There was a time when The mobile store was building high on franchisee and there were almost 200 franchisee outlet all across India. It was win win model for both company and franchisee, as company investment was nil on adding new outlet, however for franchisee it was big brand with minimum investment.

E commerce and FDI : E commerce has harmed brick n mortar store model. With abnormal flow of FDI in ecommerce companies has enabled them to pass heavy discounts to end users. Pricing offered to consumer was even below landing cost available in trade. Result, It became next to impossible to retain consumer. There was major shift in buying pattern. Ecom companies also offered easy return of goods, with no questions asked. It was first and unheard in Mobile handset industry. It prompted consumer and boosted their confidence in this new model.

With all disturbance n nuisance it become a survival task for organized retail. First step taken by big players to cover losses was to shut down less or unprofitable store.

Franchisee model : Here comes franchisee model, in franchisee model a certain percentage of margin is offered to franchisee partner, with downsizing and capital shrinking franchisee was seen as obstacle. so next step was to stop expansion of franchisee.

TMS was not alien to this. Now The mobile store is not offering franchisee to any one anywhere in India.

 

 

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