UniverCell to challenge larger electronic chains

The 1,100-cr mobile retail chain UniverCell is looking to take the brand to western and northern markets. It will spend around Rs 50 cr in advertising

Seventeen years back, a young salesman of vacuum cleaners and water purifiers set up a less-than 100-sq-ft store close to one of Chennai's posh neighbourhoods. In those days of high call rates and a dominant grey market, Sathish Babu wanted to operate a mobile handset store and be close to the city's elite who were the primary cellphone audience, back in 1998.

Babu, the founder and managing director of the Rs 1,100-crore mobile retail chain UniverCell Telecommunications (UniverCell), is looking to take the brand to western and northern markets. UniverCell has over 410 showrooms and around 60 franchisee outlets. It has plans for 1,000 more stores spanning three formats by 2015.

"We have been growing at around 40 per cent in the last two years, despite the slowdown. We are confident of growing at around 30 per cent till 2020, with mobile phones replacing most other handheld gadgets and people changing their handsets every nine months," Babu says. It had spent Rs 30 crore on advertising and would expand to Mumbai and Pune at first. Babu had earlier roped in the Tamil actor Madhavan as a brand ambassador and plans to hike ad spends to Rs 50 crore.

With its Mumbai foray, UniverCell will go up against retail giants such as Reliance Digital and the Tata Group's Croma, which sell mobile handsets, along with larger durables.

UniverCell has lined up three formats - the first a buy-off-the-shelf, the second a live store, offering a touch and feel of the products and the latest, the UniverCell Sync. The third format will be spread over 2,500 sq-ft, and will sell accessories such as small printers and pre-loaded music memory cards.

"The major differentiator is that people can experience the products and it will offer a variety of options for what they want to buy. Sync will be a cutting-edge brand and is going to be a store to stoke a passion for gadgets. We will need atleast Rs 1-1.5 crore per month per store to sustain the concept".

Beefing up its chances will be UniverCell's own brand of tablets, a handheld segment which is growing faster than handsets. The new product is expected to hit the market during the festive season and will be priced below Rs 5,000. "It will not only address the customers in the cities, but also in tier II and III towns and it will have pre-loaded education material and movies and will help an older audience to interact with their children and grandchildren, who stay abroad," says Babu.