Subhiksha extends the low-cost model to Mobiles

The largest retail chain in India, Subhiksha having 780 stores in 9 states is replicating its success in grocery, OTC Pharma drugs to mobile phones and its accessories.

Subhiksha Mobile currently has 145 mobile stores and plans to open 1000 more in next 6-8 months. In June 2007, it sold 65000 mobile phones and expects to increase this figure to 2 lakh per month to capture a sizeable chunk of the mobile phone market which is expected to have sales of Rs.20,000 crore this year.

Subhiksha will use its existing network to expand itself by opening in-shop mobile shops as well as standalone outlets. Subhiksha’s pilot mobile project has been a success as it has a market share of 10-12% in Delhi where the test run began.

Subhiksha would have a tough job at hand as competition is intensifying with the presence of Spice Mobile’s Hot Spot, Virgin-Essar’s Mobile Store and Pantaloon, who all are keen to have a pan-India presence.

But Subhiksha also has an advantage as it has a wider network of retail stores and would not have spend extra money on putting separate infrastructure for mobile shops. Also, its direct sourcing arrangements from Nokia and Motorola help it to sell them at lower prices in this otherwise low-margin business.