Eyes support, repair and re-commerce for laptops, mobile phones, set-top boxes
Amid rapid adoption of telecommunication and information technology (IT) products in India, London Stock Exchange-listed after-sales support firm Regenersis Plc is looking to replicate its globally established support, repair and re-commerce (reverse commerce) services business model in India.
The UK-based company, which provides after-sales services for mobile phones, laptops, tablets, set-top boxes, televisions and other electronic equipment, has entered India through inorganic route, and is geared to establish itself in this highly unorganised market segment.
“The interesting thing about Indian market for us is the very rapid growth that’s occurring at the moment,” Mathew Peacock, executive chairman told Business Standard. “As people move from feature phones to smartphones in India, they are spending much more money and may become more concerned about how those devices are being fixed (repaired),” he added.
According to IT research firm, Gartner, mobile device sales in India are forecast to reach 251 million units in 2013, an increase of 13.5% over 2012. The mobile handset market is expected to show steady growth through 2016 when end user sales is expected to surpass 326 million units, as per Gartner.
Earlier this month, Regenersis bought 80% stake in Bangalore-based Digicomp Complete Solutions for 4.4 million pounds (around $7 million), and also invested 750,000 pounds (around $1,206,995) in Excalibur, which provides remote-diagnostics for mobile phones. Excalibur is a US-based software company, which has a 70-engineer back-office and engineering capability at Pune.
While Regenersis has strong capabilities in the mobile phones segment, the newly-acquired Digicomp brings expertise in repair and re-commerce of IT hardware. While the two companies will be catering to the Indian market together, Regenersis will take some of Digicomp's capabilities in the IT hardware space to its global customers.
Meanwhile, Digicomp has launched retails chain in India under the brand name JustFix, where customers can opt to sell their used equipment. The company has already set up a flagship store in Bangalore, and plans to have a total of 150 stores across the country over the next three years.
“Digicomp is our first entry point into the Indian market and we plan to use the business here at Digicomp to expand our footprint of Regenersis in India. What we’ve seen is that markets like India are developing in a very similar way like Europe, except more quickly. So we can take some of the models from the European and US market and predict a thing or two,” Peacock said.
Besides telecom and IT products, Regenersis is particularly eying after-sales services for set-top boxes, demand for which is on the rise in India amid digitization of television.
“I think set-top box would be a very interesting area for us in India, because we have some very unique technology in the Regenersis,” Peacock said.
In its accounting year ended June 30, 2013, Regenersis reported 179.7 million pounds (around $289.5 million) in revenues, while its operating profit stood at 7.1 million pounds ($11.4 million)
Baa3 rating means the entity is medium-grade and subject to moderate credit risk and and has an acceptable ability to repay short-term obligations