Reliance Webstore Forays Into Handset Distribution Through ‘Hub-and-Spoke’

By November 5th, 2009 AT 3:51 PM

Reliance Webstore Forays Into Handset Distribution Through ‘Hub-and-Spoke’Reliance Webstore will now follow the ‘Hub-and-Spoke’ business model to manage its handset distribution operations. This is the first time in India that the ‘Hub-and-Spoke’ concept is being deployed by a retail chain to distribute products.

This unique business model will leverage Reliance World stores to act as distribution hubs. Each store will be responsible for registering its own channel partners and handset retailers and develop its own mini-distribution network. As part of its foray into the handset distribution business, the company has already signed-up more than 1200 handset retailers and Multi-Brand Outlets (MBOs)  in nearly 100 towns.

Commenting on the development, Mr Sarup Chowdhary, Director & CEO, Reliance Webstore Limited said,

“We continually identify new growth opportunities by leveraging our Group’s synergies across multiple sectors and competitive advantage of Reliance Webstore’s overall retail network. Our ‘Hub-and-Spoke’ model for handset distribution is unique to India and will result in remarkable convenience and efficiencies in the distribution chain. In addition to our exclusive distribution agreement with Coolpad Communications, we have also identified other new business opportunities to leverage this model for a larger participation in the Indian telecom retail sector.”

Coolpad, as part of its growth outlook, plans to establish an R&D unit in India. According to Mr Sami Al-Lawati, China Wireless’ India Head and Managing Director of Coolpad Communications, “We are currently scouting various locations across India for Coolpad’s R&D centre. The R&D unit in India will be critical to our business growth in India and our expansion across the Globe.”

Coolpad is planning an investment of Rs 400 crores in India over the next three to four years. This investment will be towards the company’s capex and opex requirements. The funds will be raised through internal accruals and debt.

In order to further strengthen its relationship with Reliance ADA Group, Coolpad is establishing a dedicated R&D unit and resources in Shenzhen, China. The resources for this unit will be directly picked from the China Wireless’ R&D team. The special R&D unit will liaise with Reliance Webstore teams across India to seek customer feedback and develop differentiated products for the Indian market. Coolpad will also leverage the pan-India retail and distribution network of Reliance Webstore to enhance sales of its dual-mode smartphones in India.

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