Home Brand Culture Sangeetha Mobiles: Retailing the smart way

Sangeetha Mobiles: Retailing the smart way

Founded by Narayan Reddy in 1974 in Bangalore by selling gramophone records, Sangeetha Mobiles is now synonymous with mobile phones and digital products in the IT city. Having crossed a turnover of INR 1500 crores in FY18 hoping to touch the INR 2000 crore mark this fiscal, the company is all set to explore new avenues.

Sangeetha Mobiles: Retailing the smart way
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The ringtone of a mobile phone might be jarring for some people, but it is still music to the ears of Narayan Reddy. In 1974, he started a humble music store selling gramophone records in Bangalore, under the name ‘Sangeetha’. Today, that company is a prominent name in the city, albeit for selling and servicing mobile phones.

Starting with just one employee, currently, Sangeetha Mobiles has a team of 2,500 people who operate its 500 stores across 6 states. The business is managed by Managing Director, Subhash Chandra L who has plans to expand the brand and gain a stronger foothold in the highly competitive Indian mobile retail market.

Beginning of the journey

Sangeetha Mobiles has been part of most major technological revolutions that India has witnessed. From selling radios to TV sets to pagers and computers, it finally joined the mobile revolution in 1997. It was amongst the first retailers in the market to have an arrangement with Nokia and JTN, which is now Airtel.

“When buying mobile phones in the grey market was a trend, we were amongst the first retailers to sell mobiles with bill and warranty. After a journey of 44 years, today, we are India’s largest mobile retail chain with over 500 stores across six states,” Subhash proudly claimed.

However, the going was not always easy for Sangeetha. Its primary challenge was to overcome the grey market where the prices were almost 50% lower than what Sangeetha Mobiles offered.

Talking about this, Subhash reminisced, “In a country like India, where buyers are price conscious, making our customers shell out a few hundred rupees more for insurance against damage and theft was a big challenge. It took us a while to make them understand the value of protecting their phones against such risks. We were also the first retailer to introduce mobile insurance in the year 1999.”

LEVERAGING ON RELATIONSHIPS

Being present in the industry for over four decades, the team at Sangeetha Mobiles has a clear picture of the entire life cycle of a mobile phone. Many a times the company has noticed that the customers are unwilling to spend more money to protect their phone’s life.

“There are retailers who give the customers what they want, but not what the customer needs. Instead of concentrating on the concept of protecting a customer’s phone, they focus on giving minimal discounts on the handsets. We insist that our customers protect their phones from damage, theft, and price drops by shelling out a few hundred rupees extra. This service-oriented approach makes us stand out,” Subhash said. 

For instance, if a customer breaks or damages their phone, the company offers a new phone as replacement at 50% cost under its ‘damage protection’ plan. This is an uncommon strategy and one which has helped the company retain most of its customers.

REACHING THE CUSTOMERS WHEREVER

By partnering with a range of logistics partners, Sangeetha Mobiles can ship their products all over the country. It claims to be the only mobile retail chain to be present in six states, including Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Uttar Pradesh, and Gujarat.

Additionally, the retail brand provides two-hour delivery service in certain locations and also does a one day delivery with the help of its logistics partners. Speaking about the developments in its delivery process, Subhash said, “In the next three years, we see a very sizeable growth in this business. We are also rethinking our online strategy with two-hour delivery service, easy returns and more; where are our online customers are as privileged to have our value-added services.”

He might have a point there, as the International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker also shows that the Indian smartphone market witnessed a healthy 14% annual growth with a total shipment of 124 million units in 2017. This makes it the fastest growing market amongst the top 20 smartphone markets globally. The market resumed its double-digit growth after a temporary slowdown in 2016 caused by factors such as demonetization and a shortage of smartphone components.

GROWTH PANGS

Subhash claimed that in 2017, Sangeetha Mobiles registered a 100% growth over the previous year. However, the initial months of 2018 also saw a plateau and was not as good as that of 2015-16.

In addition to the economic gloom that prevailed in the market, there are other complexities that caused this slowdown. One of them is the plethora of newer models launched by companies, which can put pressure on inventory management.

Additionally, with the average sales prices (ASPs) going up, the overall sales volumes per store has come down. This is compounded by the fact that real-estate prices for the stores has gone up exponentially in the past several years.

Subhash spoke about another challenges faced by mobile phone retailers. “One of the biggest problems of the mobile industry is frequent product price drops. Due to this, it is tough to liquidate the stock at a lower price than what we paid for. Still, we offer the price drop amount back to its customers as we do not want to spoil our relationship with them,” he stated. At the same time, Sangeetha Mobiles has maintained good partnerships with brands and certain vendors, which allows it to attract and offer better discounts to customers.

THE ONLINE JUGGERNAUT

Subhash believes that all it takes to compete with e-commerce giants is great customer service, impressive supply chain, and creativity. To hold its own in the overwhelming online blitzkrieg, Sangeetha provides two-hour delivery service at major towns and cities and standard delivery service according to its customer requirement. It also boasts of a top-notch customer service department where every order that comes in is answered within five minutes of initiation.

This aside, the company offers value-added services like price protection, damage protection, and theft protection. It has signed up with various financial institutions like Bajaj Finserv, Zest Money, Capital Finance, HDFC, HDB, Easy Credit, and Happy EMI, to provide a wider choice of finance options at its stores.

Sangeetha Mobiles also works with various financial companies like Pine Labs and Bajaj Finance, to draws valuable information on customer behavior from their buyer data. “Usually, markets are divided into smaller target groups based on the geography, demography and behavioral characteristics. We tailor our marketing and sales efforts to specifically reach the population segment we wish to target,” Subhash explained.

GROWING STRONG

Though Sangeetha Mobiles has an enviable footprint across South India, Subhash does not want to rest on his laurels. He wants the retail chain to have a stronger presence in Tamil Nadu and Karnataka.

“We expect a higher growth from Tamil Nadu as we have only 100 odd stores. More than Chennai we will be expanding in the rest of the Tamil Nadu region. These will be full-fledged stores and we also plan to open in the northern part of the country as well,” Subhash revealed.

The company opened nearly 120 stores in 2018 and plans to reach have 800 in its network soon. Currently, it has franchise stores in Ahmadabad and Varanasi and plans to have franchise store in Kerala as well. It also plans to open outlets in Chhattisgarh, Orissa, and Madhya Pradesh.

While a major chunk of Sangeetha Mobile’s business comes from its offline stores, it is getting good response and growth from its digital platform as well. “Apart from having our own website, which offers two-hour delivery service and VAS plans, we also sell on platforms like Bajaj and Paytm,” said Subhash. “However, we have a long way to go and we are ready for it.”

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