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ShareMumbai: Reliance Communications' (RCom) subsidiary Reliance Webstore Ltd is eyeing a 20% rise in its handset sales for FY2010 at Rs600 crore over the last fiscal even as it is looking to sell iPhones in the country.
The telecom firm's five-year-old handset retail business that generates half of Reliance Webstore business, earned Rs500 crore in FY2008-09. The company shows its handset sales figures under the wireless revenues head in its financial results.
Incidentally, India's largest telecom provider Bharti Airtel and Vodafone Essar which tried selling Apple Inc's iPhones in India have not seen much success yet.
Notwithstanding rivals' failure, RCom is looking to sell iPhones in India. "We have been into selling handsets for sometime now and we have done fine. All of our channels of sales are RCom owned or leased and not franchised. We might look at selling iPhones in India. We may source it directly whenever we finalise it," Sarup Chowdhary, director & CEO, Reliance Webstore, told DNA Money.
In India, where about 100 million handsets are sold annually (FY08-09), Reliance Webstores has less than 5% of the market share.
"The low market share is largely because we were selling CDMA handsets all this while. Also, we have just 240 stores. Thirdly, the market is fragmented between hundreds of sellers and resellers of handsets," Chowdhary said.
Reliance Webstore has now taken distributorship to sell Chinese handset maker Coolpad's highend phones in India. "Hub and spoke is our new go-to-market approach for handsets in which each Webstore will have five multi-brand outlets, which, in turn, will act as distributor of some of the handsets (like Coolpad) to other retailers," Chowdhary said.
The Coolpad smartphones are expected to contribute over 30% of the overall handset sales for the firm.
The handset business generates a margin of 3-5% for retailers depending on logistics, forecast and inventory processes. "You may not make any profit even if just 5% of inventory remains unsold," Chowdhary said.
RCom plans to set up a distribution network of 10,000 retailers across 700 cities in the next three years. The firm has signed up more than 1,200 handset retailers and multi-brand outlets in about 100 towns.
