Unveiling the Potential Rural markets

        I had visited a mobile store named 'Hatch Bee'  in Mamallapuram, near the bus stand.  It's run by a guy named Suresh, who is in his late 20's.  Had I not visited the shop, I would have never believed that a mobile store in rural or semi urban areas has much more potential than its urban counterparts.  Interesting! Isn't it?  Well, let me reveal how?

        Mamallapuram, a town 60 kms from Chennai city,  is having a population of around 15000. But this town is always abuzz with visitors from various parts of the globe. There are around 7 mobile stores in this small town. Despite the heavy competition, this store is able to garner good profits. The primary customer base of the store is residents of Mamallapuram and nearby villages and tourist visitors.  He earns more than 2500 Rs per day. Major chunk of his revenues come from selling recharge coupons and accessories and the remaining from selling mobile phone sales. Recharges are of mostly done in smaller denominations and seem to give negligible margin but the volume of the recharges, which is around  Rs 5000 per day, is so high that the they fetch considerable amounts. Accessories sales account to 70% of his  revenue and as the most of the accessories sold are local made margin on them is too high. On an average he sells around 35 handsets per month. Around 80% of the handsets sold are non branded(Chinese/local made) and Nokia, Samsung and other branded phones constitute just 20% of his total sales. He is also an expert in repairing the mobiles and earns not less than 500 a day for servicing the mobiles.

Let me introduce you to more interesting revenue generating idea in these kind of stores. Can you even imagine that transfer of music to mobile phones is the most happening business here? and No, it's not illegal either! Mobile Music Exchange (MMX) is a company that issues licenses to the stores to authorize them to transfer music legitimately. These stores pay of license fee of 15000 per year. As the rural areas have limited or no access to the internet facilities this music transfer business is the emerging business here.

        He also adopted the cross selling strategy. He also provides internet cafe service in the same mobile shop! The target customers are the foreigners who visit Mamallapuram and the services are charged at Rs 25 per hour.  He pays a rent of Rs 1500 for the internet connection and 2500 for the shop. He buys the stock from Chennai city every 15 days. Now, it's to you to do a simple math on his profitability! 

       

Nageswara Reddy L 

FT13443