The Mobile store in expansion mode : will add 700 new stores

The Essar Group-owned telecom retailer, The MobileStore, is planning to add 700 outlets in the next six months. The company already has 1,200 outlets across 200 cities and 45 per cent market share in organised telecom retail.

“We will be scaling up our business by 50-60 per cent by the end of March. The time is right now because all the sentiments of economic downturn and problems with retail are over. People are spending and retail space is available at the right price, which was not the case earlier,” Srikanth Gokhle, CEO of The MobileStore (TMS) told Business Standard.

The company has started the process of adding 200 stores and has around 100 stores in the pipeline. To hasten its plans, it decided to adopt the franchise model in tier-2 and tier-3 cities and towns. The model will help the company add around 500-600 stores, leveraging the existing supply chain system which has already been set up by the company. TMS will also make working capital investments in these franchises.

“We will give franchisees the know-how and training. We will also provide them with furniture and fixtures to maintain the identical look of the brand, across all our 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,” said Gokhale.

Falling handset prices, with increased features, rise of Indian brand mobile phones and higher telecom penetration are helping handset sales grow in smaller towns. The company will start advertising in national newspapers for franchises very soon.

In addition to increasing the number of outlets, the company is planning to scale up by way of acquisitions. TMS is in discussion with a key national-level retail player and is conducting due diligence on the deal. It is also in talks with three retailers at the regional level to acquire assets.

As the telecom markets get closer to the launch of 3G services, TMS is also gearing to sell more smartphones. “We expect smartphone sales to increase from 15 per cent to 30 per cent in the next six months. All the major brands like Nokia, Samsung, BlackBerry are aggressively launching new models in the category,” said Gokhale.

To leverage on this, TMS has started a new service called connected world, where it gives a live demonstration of all the applications possible in the 3G era. The company has already started this service across some of its outlets and plans to augment soon.

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