Weekly Startup Profiles > MobileNXT
|Choosing the right mobile, finding accessories can be difficult if there's no one in the shop to help. MobileNXT brings high service to small town mobile buyers|
MobileNXT chain of retail stores selling mobile phones.
Vijay Menon and his co-founder Romy Juneja traveled the length and breadth of India while working in sales for Motorola: from big cities to small towns. And in the smaller cities and towns, they watched people struggling while purchasing phones. The phones were available, certainly, but the retailers either didn't know enough about the different features, or simply lacked the patience to explain.
Observing this, Vijay and Romy believed that there had to be a better way to sell phones in smaller towns of India, a way that helped the customers better understand the options, match their needs with a phone, and then supported customers after they left the initial purchase.
Vijay's insight coincided with his desire to do something on his own after 15 years of corporate life. "In India, there was this opportunity to take risk...this phase in India is all about growing entrepreneurship. I always had this urge to do something on my own. And I was nearing 40 years of age and I realized, if I don't do this now, I'll never do it ever."
Vijay was, in fact, toying around with the idea of running a coffee estate, when he and Romy started talking. Together they decided to quit Motorola and start a company that would solve the problems they'd both seen in the smaller towns. They founded MobileNXT to make it easier and more pleasant for people in smaller towns to buy mobile phones.
MobileNXT is a chain of retail stores selling multiple brands of mobile handsets, mobile accessories, value-added services and data transfer facilities.
Almost everyone has seen an iconic photo of an Indian farmer holding a mobile phone to his ear - an image that captures the almost explosive growth in use of mobile phones across the country. In fact, according to Indian television.com, in July 2007 India had almost 200 million mobile subscribers, and that figure was projected to increase to over 250 million by year end. MobileNXT is positioned to capture some of that growth, specifically in the smaller towns.
Vijay describes MobileNXT's customer as the younger girls and boys who are looking for specialized value-added services. "They don't want just a phone. They want to keep adding to it. And we have a whole range of handsets of all brands, and all available options when it comes to panel colors, models, and added features. In addition, we provide different software and over 100 accessories," explains Vijay.
MobileNXT has also set up its shops to help customers fight their way through the almost limitless choices. MobileNXT arranges products by function, rather than brand. For example, MusicNXT showcases phones with FM and the Sony Walkman series; WorkNXT is the category of phones having PDAs, and so on.
To overcome the problem of retailers not being able to explain the functions, MobileNXT has placed interactive kioks in its stores "We don't charge anything extra for this facility," he says.
MobileNXT has also added other benefits, Vijay explains that "Downloads with us, come at a 15 to 20 percent discount compared to regular downloads." And the company offers the 'Loyal Exchange Program' which allows customers to exchange their phones bought at MobileNXT, within one year of purchase at for a pre-agreed amount.
It's MobileNXT's focus on providing high service retail in smaller markets that Vijay believes makes the difference against the competition. "The mobile retail market in India is highly dispersed with most of them being mom and pop kind of stores," explains Vijay. "I think there are about 100,000 outlets selling 500,000 phones." However, Vijay summarizes, "We were the pioneers in organized mobile retailing with focus on service along with the product."
Vijay does admit that, "Lots of people are getting into this space but the market is very vast," says Vijay "The total market size is about 100 thousand crores. Out of which, one of the bigger players, ESSAR has about 3-4 hundred crores of the market." So Vijay feels that there is enough room for other players to flourish.
"Investors don't invest till they see your concrete business plan," explains Vijay. And getting this was not easy. "We pitched to at least 50 investors," says Vijay. "Out of which about four or five responded." MobileNXT raised angel funding of one million dollars to get started.
MobileNXT has since raised a second round of funding, which closed in September 2007. This round came from Network 18.
MobileNXT's founders, Vijay and Romy, brought deep experience in sales and marketing in telecom and other sectors. Vijay has worked in Motorola, GE, Xerox and Blow Plast. Romy has worked in Motorola, Gillette, BPL and Usha International.
Started by just two people, the company has grown to over 150 employees within one year.
MobileNXT has been opening stores rapidly since its founding in March 2006, and currently has 45 stores all over India.
In its first year, MobileNXT achieved turnover of over 25 crores. According to Vijay, this is expected to almost double in this year, with expansion of an additional 100 stores in 2008. "By 2010 we hope to have 500 stores," says Vijay.
The firm has ventured into three different retail models: standalone stores, stores-in-stores and virtual stores. "We intend partnering with bigger retailers on the lines of a shop-in-shop concept," explains Vijay. Mobile NXT has established partnerships with retailers that include the Tatas' Star India Bazaar, Landmark bookstores and others.
In order to facilitate even more rapid growth, "We've kicked off a franchisee program as well," explains Vijay. "As long as we focus on smaller towns, where no one is really going right now, we'll have a head start and early mover advantage. We'll consolidate our position."
"Operational challenges - Like keeping a track of things, inventory and cash. It's also maintaining the quality of service," Vijay explains.
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