Indiantelevision.com Team

(24 December 2007 8:00 pm)

BANGALORE: Reliance Retail (RRL) has launched its third consumer electronics mega store in India – Reliance Digital (RD). This is its first such store not only in Bangalore but also in South India.

The company plans to launch 150 stores over the next three years in India - 50 of them in South India.

The Bangalore outlet, which is spread over 23,000 square feet, is the largest such store on a single floor in South India, according to RRL president and chief executive (consumer, durables, IT and telecom) Ajay Baijal.

RRL positions its RD format stores as a one-stop shop for all technology solutions in the field of consumer electronics, home appliances, IT and telecommunications. The Bangalore store will stock over 4,000 products from 150 brands ranging from home appliances like television sets (TV), kitchen appliances, electronic games, mobile phones, computers, computer peripherals, home theatre equipment, automobile electronic equipment, etc. Through its RelianceresQ, the company will provide within-warranty and outside-warranty services to its customers. Through Reliance Finance, the company will provide finance for a number of products.

RRL has also recently launched a small store format - the Reliance i-Store, in Bangalore. The company has a special arrangement with Apple, and the i-Store sells Apple and Apple compatible products. There are plans to launch 50 such stores in India over the next three years, informs Baijal.

The first RD mega-store was launched a few months ago in Ghaziabad, UP to cater to the NCR region, while the second one was launched in Mumbai.

By March 2008, there would be about eight RD stores – one more in the NCR region – at Gurgaon, Harayana; one more in Hubli or Mysore in Karnataka and possibly two in Hyderabad, Baijal says. The store to be launched in Gurgaon will be spread over 33,000 square feet. He also adds that since B and C towns are showing much higher growth than the metros, quite a number of the new RD stores could be in these cities.

Though Baijal could not put an exact figure to the investments that the 150 stores would entail, he said that the RD stores would be spread in sizes ranging between 15,000 and 35,000 square feet. The 150 stores would cover an area of about 3 million square feet. The average cost per store would be around Rs 50-60 million, and Baijalo put an approximate figure to the spends as around Rs 8 to 9 billion for all the planned stores.

Baijal expects revenues to cross $ 500 million (Rs 20 billion) by March 2009 and $ 5-5.5 billion (Rs 200-220 billion) by March 2011, of which $ 1.6 to 1.7 billion (Rs 64-Rs 68 billion) will be through the RD mega stores, the i-Stores, and from about 1,000 hyperstores that RRL has planned to complete launching by 2011.

Moreover, RRL will be selling some of the RD products through Reliance Fresh outlets, which will also act as pick-up points for service of products purchased from RD stores.

“Actually, this is the fourth RD store that we have now, if you take into account the 25,000 square feet or so digital shop-in-shop that we have in our 160,000 square feet Ahemadabad hyperstore,” says Baijal.

“The home electronics market in India is worth around Rs 700 billion today, and is growing at around to fifteen to twenty per cent annually. Over the next five years, the market size should cross Rs 1,400 billion,” informs Baijal. “With rising incomes and falling prices of electronic goods in India, the potential is huge,” he adds.

“Take the case of LCD television. In the first year, about 32,000 TV sets were sold; 200,000 were sold last year. By March 2008, it should be around 600,000 pieces, and next year the demand is expected to cross 2 million numbers, all this is because of the falling prices,” explains Baijal to stress his point further. Baijal was once the CEO of the consumer electronics division at BPL.

RRL plans to have a cachement mass media marketing programme though the print media initially and later on when there are enough RD stores running, through television. RRL has its own in-house creative and media-buying agencies.