IndiaRetailBiz

The MobileStore, the Ruias owned telecom retail face of the steel to oil Essar group, is looking at achieving a turnover of Rs. 5,000 crore ($1.25 billion) by 2010. The MobileStore was set up following the sale of Essar group’s telecom joint venture with Hutchison to the UK-based Vodaphone, in the next three years, says a Business Standard report.

The retail chain, which so far has set up about 400 stores across the country, is already clocking a turnover of Rs. 1,000 crore, growing at 20%. In fact, riding on the telecom boom, which is seeing addition of over six million mobile phones every month in the country, it has begun achieving sales of Rs. 150 crore per month.

This growth has become possible as the highly fragmented mobile phones market is slowly but surely shifting in favour of large organised players. Leveraging on the unprecedented growth recorded by the sector, almost all big retailers dealing in consumer electronics have jumped into the fray either on their own or in joint venture. Among others, they include, Croma (Tata), Reliance Digial (Ambani), e-Zone (Biyani), Next (Videocon), Cellcom (RPG), and Subhiksha (Subramanian).

According to expansion blueprint prepared by the group, the retail chain will multiply the number of its stores from 400 at present to 2,500 spread across 50 cities by 2010. In the process, the retail chain hopes to increase its current market share of 3% to 10%.

To increase its visibility and proximity in potential locations, the company is also looking at setting up 250 independent small format stores and shop-in-shops in large retail stores, offices, commercial complexes, and colleges.

Among other activities, the chain is also selling mobile connections from its stores, garnering a market share of 1%, which, over a period of time, is expected to go up to 10%. chain Music and gaming category, which has market share of 5% is also growing fast and is expected to go up to 15% in the coming months.

While, the mobile phones retailing is a low margin business (5% to 7%), electronics and accessories contribute a higher margin of 20% to 40%.

To increase its presence and market share the chain also willing to consider suitable options for inorganic growth.