A minute for your Feedback please

Sunday, July 15, 2012

Understanding telecom retail in India-some pointers

At the outset, let me clarify that I do not consider myself an expert on telecom(or on anything else for that matter :P). This blog post is only based on certain observations/analyses and inferences during personal visits to telecom stores in Mumbai and Bangalore. For modern trade(malls etc), this may not apply due to space issues and also as they often do not carry the entire product range.

  1. Commoditized SIMs/data cards: Thanks to the relatively low margins that retailers make on SIM activations, the poor SIM salespersons are given a stall outside the main store(!) with a packet of forms etc. So it is abundantly clear about their pecking order in the hierarchy of things!
  2. Single brand versus multi brand stores:- All the operators be it Airtel, Idea, Vodafone, Reliance, Aircel all have exclusive outlets, which seem to focus on the consumer experience and awareness. That is why in the outlets I've seen, the focus is more on 1-1 selling and wider display of products/schemes, rather than the claustrophobic multi product strores I've seen(like The Mobile Store), that focus on max yield per square foot
  3. Recharges not always sold in telecom outlets:-As that involves manual effort and all, many don't find it profitable to sell these recharges..indeed its mostly the kirana stores and other non exclusive outlets that sell these. 
  4. Handset demos often not given:- Shops are aware that customers often check out the devices in the shops and then shop for it online. This problem is for books also, but there one cannot avoid showing the book itself unless its plastic shrinkwrapped(which may bring down sales though..). So often only the expensive/fancy phones are displayed but not the entry level handsets below Rs 10,000. And demos are given only for displayed products, few retailers will open the box and show you. 
  5. Multi brand recharges/devices/data market:- Most retailers give a wide bouquet of all the popular operators, so there is no brand loyalty at the retailer level. So often the same retailer will have nameboards showing his name from all the main operators! 
Anyways, given that around 90%+ of Indian voice market is prepaid(and from early indications the data market seems going the same way), the front end is resembling a FMCG set-up. For fixed line, a DSA setup seems to work due to the unique economics of that business. 

No comments: