RPG Cellucom heads for premium placement

MUMBAI: The store count for RPG Cellucom has remained at 200 for three months now, in stark contrast in a scenario where even one store opening per day is stated as a matter of fact. Yet, this stagnant number does not mean that no new stores have come up — rather, that as many stores have been closed as opened.

Arun Nagar, chief executive officer and managing director, Cellucom said, “In the last three months we have closed 35 stores which weren’t profitable ventures. All the new ones have been selected keep size, locality and rentals in mind.”

The joint venture between Dubai-based retailer Cellucom and India’s RPG Group, which has mobile outlets all over the country, has also shifted focus from being a mass player to that of a slightly premium player with MP3 players, PDAs, laptops and global positioning systems gaining importance its offering.

“We are offering mobility solutions to the ‘discerning customer’ and are not just a digital supermarket. This is a category nobody is focused on and yet the demand is growing exponentially,” said Nagar.

The company has gone big on global positioning systems, which it feels will catch on fast in the domestic market. This twist in the tale is reflective of the change in strategy for RPG Cellucom, as for many other retailers, focus has shifted to profit-making business rather than simply increasing the store count. High rentals and wafer-thin margins have sent several retailers back to their drawing boards, RPG Cellucom seems to be one of them.

“When we entered India we were told this market is very different. But Indian consumers require devices which are not very different from their global counterparts. Most of our consumers are not here to buy their first device,” said Nagar.

The change in strategy and shutting down of unprofitable stores has helped RPG Cellucom achieve a 20% increase in month-on-month sales. The firm expects the festive October to record a 150% jump in sales.

And it won’t stay put at 200 stores. The company plans 500 stores by March 2010, with an investment of Rs 500 crore, which is being pumped in gradually, starting a year-and-a-half ago.

s_tanvi@dnaindia.net