General Trade has played a significant role in the Indian mobile phone and telecom market since 1996. The industry has evolved significantly over the last two decades. When I joined BlackBerry back in 2008, general trade contributed 90% of the mobile phone sales in the country. Today it is down to about 50%. This is despite the fact that General Trade owners provide exceptional personalized service and the convenience of buying locally is unparalleled. The decline in GT contribution is largely due to three factors:
1. India has changed with rapid digitization. Per capita income levels are rising and consumers are looking for convenience. Every business needs to be enabled through internet to be able to connect with evolving customers, manufacturers, distributors and vendors. Majority of customers now discover products online first before making any purchase decisions. GT has typically lagged behind in technology adoption.
2.Brands, technology, and products have evolved rapidly. The “old brands” knew how to deal with GT, the newer brands are finding it difficult to engage with the spread and depth of GT. In my conversation with senior executives of many new entrants I find them perplexed by the fragmentation and complexity of GT. They try hard to figure out how to build their presence in GT. It takes years to build grounds up distribution and store level presence across the hundreds of cities in India. This gap therefore needs to be fixed.
3. Experience at GT stores has largely remained unchanged. Only incremental changes have taken place. GT stores are not interesting enough for youngsters so they prefer going online. Investment in modernizing the shop level experience is a must for GT owners if they want to sustain the business going forward.
Most recently online sellers have created havoc for GT channel in India. Smartphone sales have attributed significantly to the growth of these players. I personally don’t think that e-commerce players are doing anything special or their value proposition is compelling when it comes to smartphones. Other than pricing play or exclusive products I do not see any other reason why one must feel compelled to buy smartphones through online portals.
When it comes to variety and choice even the smallest of GT stores carry most new models. In my experience in any of the over 600 districts of India you can probably find the latest smartphones within 10-15 minutes of drive from your home. So we have to build on that value proposition. The ease of buying locally from a trusted store.
A few hundred rupees saving online is not necessarily the trigger for customers to buy online. We have all dealt with the pain of returning that latest smartphone or accessory we had ordered but instead wrong product was shipped. The wait is painful. You grind your teeth.
So the idea is can we attract customers who are looking for convenience, quickness and face-to-face interaction before spending significant amount on their next smartphone purchase. Can we let customers discover the best offers and festival promos at the click of a button from the convenience of their homes before they show up in the store.
There is a solution for GT – we have to showcase our strengths to brands, and to customers. We have to use internet to connect with them. We have to provide much better after sales service and solve customer problems for the lifetime of a smartphone and not just be done with one time transaction. Sofyx will provide that solution soon, it will be simple and cost effective. We believe that with some handholding and a few tools the GT retailers can evolve to a new channel that will position them well against the larger online and organized trade channel. Stay tuned for our next article on specifics of how we will help transform the GT retail.
I would love to hear from you. Please don’t hesitate to WhatsApp me at 9871110785 with your views.