Given the scenario, 
a few intelligent ones like RPG Cellucom have latched on to an innovative business model to succeed in the mobile retail sweepstakes. In Feb. 2008, RPG Cellucom launched their own private labels for mobile accessories, willing to make additional profits through this route. Says Singh, “Our core target audiences are the tech-savvy people and we would continue to leverage through cross-selling and up-selling of our offerings.”
This strategy also makes more sense because gross margins in the cell-phone business are a meager 4-5%, whereas the upcoming accessories market boasts gross margin to the tune of 15-30%. Small wonder that even players like Subhiksha and mBazaar have begun evaluating the private label for accessories. But this strategy has its loopholes. Of the 100 people who buy cell phones, only about 10 look for accessories. With such low demand statistics, will having their own private labels fetch adequate returns on investment for these retailers? Brand analyst Harish Bijoor feels that private labels can be an option but that “Going forward, personlised solutions in terms of desired features would be the key to their success.”
Personlisation to the extend that customers should be able to choose whether they want a camera in their phone and if yes, then the kind of configuration that the camera would have. This would mean that handset manufacturers share some product specification functions with these organised retailers. But in the ‘mass models’ driven Indian handset industry is in presently, this is easier said than done.
For now, organised retailers are doing a fancy job of aggressive expansions, but in the long run they’d have to choose their own innovative route to add-value for consumers. And that perhaps would be the key to become the King of this Castle.
a few intelligent ones like RPG Cellucom have latched on to an innovative business model to succeed in the mobile retail sweepstakes. In Feb. 2008, RPG Cellucom launched their own private labels for mobile accessories, willing to make additional profits through this route. Says Singh, “Our core target audiences are the tech-savvy people and we would continue to leverage through cross-selling and up-selling of our offerings.”This strategy also makes more sense because gross margins in the cell-phone business are a meager 4-5%, whereas the upcoming accessories market boasts gross margin to the tune of 15-30%. Small wonder that even players like Subhiksha and mBazaar have begun evaluating the private label for accessories. But this strategy has its loopholes. Of the 100 people who buy cell phones, only about 10 look for accessories. With such low demand statistics, will having their own private labels fetch adequate returns on investment for these retailers? Brand analyst Harish Bijoor feels that private labels can be an option but that “Going forward, personlised solutions in terms of desired features would be the key to their success.”
Personlisation to the extend that customers should be able to choose whether they want a camera in their phone and if yes, then the kind of configuration that the camera would have. This would mean that handset manufacturers share some product specification functions with these organised retailers. But in the ‘mass models’ driven Indian handset industry is in presently, this is easier said than done.
For now, organised retailers are doing a fancy job of aggressive expansions, but in the long run they’d have to choose their own innovative route to add-value for consumers. And that perhaps would be the key to become the King of this Castle.
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Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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