Founded in 1997, UniverCell is one of the early entrants in organised mobile phone retailing industry in India. From a maiden outlet in Chennai to the current presence with over 450 stores across South India and Maharashtra, its journey has been quite remarkable. The strategy to invest in innovative retail concepts, formats, technologies and processes has worked well for UniverCell and its average annual growth rate for the past five years has been of 30 percent. During financial year 2012-2013, the chain’s turnover touched a new high of `1,060 crore. Now all charged up for big bang growth, it is planning to open 700 new stores pan-India, through a mix of both flagship and franchisee locations, by the next fiscal
Genesis and growth
Chennai-based UniverCell Telecommunications is a mobile retailing company started by D Sathish Babu, who is also the managing director of the company. Already dealing in post-paid mobile connections and branded cell phones, he discovered that there were no branded or organised mobile retail showrooms and so the customers were unable to access the entire range of products available in the market. Hence, he saw a big business opportunity in this space and launched the company. “UniverCell was formed with an aim to enrich the customer by understanding his needs and recommending comprehensive mobility solutions. We wanted to provide customers a mobile store with an ambience that combines both comfort and a high degree of service allowing them to make intelligent and informed shopping decisions,” says Babu.
Within 10 years of operations, the company had built a significant presence in South India through 100 stores. “As on March 2013,our turnover was `1,060 crore,” shares Babu and adds: “For the last three years, on account of growing cell phone market especially of smartphones and the rising CAPEX in India, we have been making brilliant profits.” Having become one of the leading retailers in South India, UniverCell has over 450 stores in Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, and Maharashtra. This also includes 25 franchisee run outlets.
Trade dynamics
UniverCell showcases mobiles, tablets, and accessories from among the world’s best-known brands in its stores. It also runs an operator products division that provides data cards, data plans, and phone recharge services. The outlets cater to people from all walks of life; however, majority of the customers belong to educated middle class falling between the age group of 20 and 35 years. According to Babu, although the category of mass mobiles priced around ` 2,000 to `3,000 is growing steadily, increasing number of buyers now prefer smartphones. Tablets are also a high growth segment. He observes: “For mobile phones, the price band between `10,000 and Rs 20,000 is most popular. But a portion of customers is willing to pay even above `25,000 for a smartphone. The current favourite models in this segment include Samsung Galaxy Note 3, Samsung Galaxy Grand, S-Duos, Sony Xperia M/C, Apple iPhone 5s, Nexus 5, HTC Desire, LG G Prolite and Nokia Lumia 520. Also, we find that tablets in the price range of `10,000-15,000 are in demand.”
Success mantra
The company has continually evolved its market positioning to suit the customers’ needs. Initially, it presented itself as the “preferred destination” for purchasing mobile phones. Later, with an experienced sales team at place, the company became more customer service oriented. “Nowadays, most of the customers who visit our outlets are well informed about the products and their features. So, we have also evolved into an experiential platform where they can touch, feel and interact with the gadgets, before rounding in on their preferred product,” elucidates Babu.
Store set up
As of now, UniverCell has three store formats – regular, Live, and SYNC stores. It started off with stores sized 150 to 200 sq.ft., but soon realised that larger space was needed to fulfill the brand’s objective of providing enriching shopping experience to the visitors. Currently, the average store size is 800 sq.ft., with smallest outlet covering 500 to 600 sq.ft. Most of the SYNC stores are located in metro cities, while regular and Live formats are found in other geographies. The set up cost for regular and Live formats is `1,000 per sq.ft., whereas for SYNC, it is ` 3,000 per sq.ft.
For a new store, right location, market size, and general trade scenario are the critical decision variables. Babu clarifies: “It is important to identify the right market and introduce the format accordingly. We study the demographics of our target group and the state of modern trade in the area before setting up a store there. Malls and high street with high footfalls and increased modern trade determine if the location is good.”
Typically, the stores are run by a manager, but in bigger stores, he would be accompanied by an assistant. The operations team comprises sales force, billing teams and OEM promoters. They are given initial training as well as regular updates on new products.
Business innovations
Over the years, UniverCell has introduced varied products, services, and retail concepts. In its Live stores, the phones are grouped according to their categories such as business, music, photography and gaming. With widest range of latest phones and tablets at display in these stores, the customers can feel, touch and most importantly experience the products before buying. Additionally, the well-trained sales team recommends an appropriate handset according to the customer’s need. On the other hand, SYNCs, the newest addition to the brand’s store formats, are unique “techsperience stores” that are smartly segmented into various zones: music, imaging, social, productivity and noteworthy. SYNC is a cutting-edge brand aimed to stoke up the passion for gadgets. Babu also explains that the major differentiator between SYNC and other formats is that it allows customers to experience the gadgets, accessories, and apps to the fullest and assess what suits them best.
Apart from products, UniverCell stores also provide value-added services such as mobile phone insurance, which is applicable for all new phones purchased from all sources; spot finance with Bajaj Finserv; and Techspert Services, a post purchase setup support at customers’ doorstep. Besides launching a 24×7 technical helpline for privileged customers, the retailer also has m-commerce apps for the benefit of mobile users.
Marketing strategy
The brand keeps coming up with new marketing initiatives. On occasions such as New Year, Dussehra and Diwali, it runs attractive offers and discounts to increase walk-ins to encash the festive season boom. One of its successful campaigns was a week-long Tablet Art competition intended to promote the tablet segment. Such marketing and PR initiatives increase the brand recall and also are business boosters. Besides this, UniverCell has tied up with Payback, India’s largest multi-brand loyalty programme, to pass on the benefits of its loyalty programme to the UniverCell Payback card holders. They can even redeem points earned in other Payback partner stores such as Future Group, Big Bazaar, Vodafone, e-zone and ICICI Bank at UniverCell stores.
Competition intensifies
In the recent years, the competition in mobile retailing space has intensified with advent of new mobile retail chains. Manufacturers are launching own stores and there are many online players too. Babu says: “Anybody selling a mobile phone is my competition. That includes all organised and unorganised retailers whether they are physical stores or e-commerce portals.” Yet he feels comfort in the existing market which is rife with the first time smartphone buyers who want to experience the product, understand its benefits, and get the expert’s recommendation before buying. He asserts: “This is where our LIVE stores come in. Moreover, our customer-centric environment and unique after sales services is what sets us apart from our rivals.”
Expansion plans
Believing in sensible expansion, UniverCell would like to have profit-making stores rather than milestones. As mentioned earlier, the choice of store format depends on market potential. This strategy prevents errors and helps in avoiding the regressive course correction process. Recently, the company began its nationwide expansion and opened six outlets in Maharashtra. By the end of the current fiscal, it plans to enter Delhi, Ahmedabad, and Surat. Sharing the brand’s roadmap for further growth, Babu says: “There are plans to roll out 700 new stores by the next fiscal. This will include 500 flagship and 200 franchisee-owned stores. We will be expanding widely into tier II and III cities in southern states, but our focus will be in West and North regions.” Importantly, the chain is looking at expansion in smaller cities and interior parts of India under franchise business model. UniverCell is also planning open to shop-in-shop model with a right partner.
*This article was originally published in the Feb 2014 issue of IMAGES Retail.
