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IT's UniverCell Appeal:Sathish Babu

o Shubhra Rishi
16.05.2014 kl 21:46 | CIO India

Sathish Babu

 

Sathish Babu

Founder and CEO, UniverCell

In the last 13 years, that gap grew into UniverCell, a Rs 1,000-crore mobile retail chain, with 450 stores in 300 locations, that sells three times more phones than any of the other large retailers in the country, says Babu. But now Babu is faced with another challenge: To ensure mobile retailing stays relevant in the age of e-commerce--and grow UniverCell into a Rs 10,000 crore company by 2020. IT, he says, was key to getting UniverCell to where it is today and it will help it get to the next milestone.

CIO: You opened UniverCell, among the first organized mobile retail stores, back in 2000. What made you think it would succeed?

Sathish Babu:

In the early days, the Indian mobile retail market was fragmented with no organized retail chains selling mobile phones. It was also an extremely grey market, remember this was before the dotcom age and much before Google. In addition, call rates were as high as Rs 16.80 a minute, and customers were forced to negotiate to get a good price for a phone.

What they weren't being offered was proper ambience and the right kind of information they needed to purchase a mobile device. That's where I sensed a tremendous opportunity. We could provide customers with a unique platform, which would make the experience of buying a new phone pleasurable and ensure that they paid a reasonable price for their phones. When I decided to open UniverCell's first mobile store in Chennai in 2000, there was a decent amount of apprehension from people close to me. They advised me against taking the plunge as no large companies were investing in mobile retail. Slowly, over the first 10 years, UniverCell opened 10 stores in Chennai. We could do so because we invested in people and IT, and I think these helped us tremendously in building the UniverCell brand and setting us apart.

CIO: The mobile retailing market is worth Rs 50,000 crore and growing. What's your growth been like?

Sathish Babu:

Our track record proves that we have been growing consistently. In the last two years, we grew at the rate of 40 percent, despite sluggishness in the market. We are confident that we will continue to grow at around 30 percent till 2020. If we focus on market trends, smartphones will replace most other feature phones and gadgets. According to GfK research, smartphone sales will round off at 163 million units annually by 2015, up from 106 million in 2011. Our smartphone sales have doubled at 60 percent, compared to 30 percent last year. Even the number of UniverCell retail stores across Bangalore, Chennai and Hyderabad have grown from a mere 100 stores in 70 towns--to 450 stores across 300 locations in South India.

CIO: You give IT a lot of credit for UniverCell's success.

Sathish Babu:

Today, we are a Rs 1,000 crore company. It would be inappropriate not to give IT a fair share of the credit for UniverCell's consistent growth and success. Even during the inception years of the UniverCell brand, we needed to know more about our customers; what models they liked, and what time of the day they had a tendency to buy more. Therefore, we invested in technology, which at the time, wasn't very affordable. We introduced a central server system to connect our stores when most other companies relied on fax machines to communicate. Looking back, I have to say that our early investments in IT paved the way for a better future. Today, we have a dedicated team that looks after IT deployments. We have already implemented an ERP system that ties all our stores and enables the exchange of real-time data.

CIO: Are you depending on IT to get to the next milestone?

Sathish Babu:

We want to become a Rs 10,000 crore company by 2020, that's a 30 percent year-on-year growth. With 100 new stores in the pipeline, we will grow to 550 outlets this fiscal. We are investing in IT and we plan to connect all these stores using an ERP platform. We have new format stores such as SYNC to improve customer experience. We want to build a system of intelligent connects with the customer that will enable us to identify the customer the moment he enters our store. In this age of cashless transactions, we are looking at investing in wireless IVMs (intelligent vending machines) that will provide customers with a seamless shopping experience. This means our investment in IT is only going to increase.

CIO: Isn't it true that advertising was also crucial to your success? What's your take on digital advertising?

Sathish Babu:

I used advertising as a medium to get quick recognition and increase UniverCell's brand awareness among consumers. We started by advertising in the classifieds section of Tamil dailies and that propelled phone inquiries. We gradually moved to press and television. Between 2 to 3 percent of our sales budget is set aside for advertising.

Today, digital has expanded our reach to customers, both old and new. It is a cost-effective way to create traction for our brand and allow easy access to the younger, under-30 crowd. During festivals, we indulge our online customers with several offers that allow them to either buy online or visit our stores. I take inspiration from countries like China and Vietnam where a number of large retailers are moving away from television and are increasing digital spends. We are taking a similar position. While it's true that digital outreach is still very nascent, we will continue to leverage it in order to stay relevant to customers.

CIO: How else are you leveraging new media to acquire customers?

Sathish Babu:

We have been an early adopter of new media. From e-mail and SMS-based promotions to Facebook, we have come a long way. Today, we have a dedicated team that monitors our Facebook community, which is 5 lakh strong. We introduce new contests and offers and promote them on social media. For instance, on children's day, we wanted to encourage kids to come to our stores and participate in a tablet contest. So we promoted the activity using social networks and received tremendous response. All this was made possible without TV or radio. We also collected a tremendous amount of information on consumer behavior based on likes, dislikes and feedback from our customers. We also have a loyalty program called Payback where our customers can earn loyalty points by shopping at our stores.

CIO: UniverCell is strong in the south. Do you plan to expand to other geographies?

Sathish Babu:

Very few retailers from the south have expanded to the west. It's the south where the actual retailing happens; while in the north, it's mostly discount retailing. There's no customer experience involved and the market is mostly price-based. It's the mall-culture in the north that's encouraging retailers to get organized. As far as the south of India is concerned, today, we have a presence in towns as small as Srikakulam (pop: 1.26 lakh) in Andhra Pradesh. In other parts of the country, we have already entered new markets like Mumbai, Pune and Ahmedabad. We plan to open 100 new stores this financial year, out of which 25 stores will be set up in the two cities (Mumbai and Pune). Consumer interest has been very encouraging. We also have plans to expand to northern markets in the next year.

CIO: Wouldn't that put you in direct competition with stores such as Chroma?

Sathish Babu:

Today, UniverCell has about 450 stores in India. The truth is that we sell three times more phones than any of the other large retailers in the country. We are not dealmakers but we want to create a specialized experience for customers and that's what sets us apart. We are a telecom specialty retail store and we understand our customers far better than anyone else.

CIO: How else are you ensuring ever-increasing growth?

Sathish Babu:

Mobile retailing is such a dynamic market and you have to continuously come up with innovative schemes to stay relevant. That's why the UniverCell brand gives its customers a variety of options. We started by letting customers simply buy off-the-shelf. Then, in 2009, to reignite the interest of consumers, we launched a touch-and-feel concept store called UniverCell Live. Apart from allowing customers to use and experience 'real' phones, the stores also had download kiosks and virtual gaming zones. Today, we use both formats of the stores.

This year, in July, we launched our first 'techsperience' store called UniverCell SYNC which lets customers select gadgets from a variety of devices such as music, imaging, social/productivity and the Noteworthy, which is a very popular feature of the SYNC store. It is also a first-of-its-kind store in the sense that it allows customers experience gadgets that haven't yet been introduced to the Indian market. Going by how complicated phones are becoming, our personal services will go a long way in delivering excellent customer experience by helping customers figure out what they want to buy.

CIO: How do these different store formats facilitate sales?

Sathish Babu:

India is a replacement market, which means that the number of customers coming to stores to buy mobile phones for the first time is negligible. Today, there are customers who will research online but buy a mobile at a store, and then there are those who will research and buy online. We want more people to come to our stores and hence, the need to create and upgrade our experiential-themed stores.

According to GfK, the average selling price (ASP) for mobiles in India is less than Rs 3,500. But the ASP of a customer coming to a SYNC store is close to Rs 20,000. If you look at the buying pattern of different customers, they are likely to spend an additional 10 percent on mobile accessories such as headphones, cover, skins, and pouches, etcetera. Therefore, we have trained our sales staff to recommend additional items and increase the bill size.

We are also experimenting with selling new and quirky mobile apps. For instance, health apps aimed at helping consumers quit smoking or control diabetes. These are available exclusively at our stores.

Shubhra Rishi is senior correspondent. Send feedback on this interview to shubhra_rishi@idgindia.com

Keywords: Mobile  Industry Verticals  
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