Realme to increase offline presence, plans standalone stores

Abhishek Law Kolkata | Updated on February 19, 2020

Madhav Sheth, CEO, Realme India and Vice-President, Realme

Plans ₹1,500-crore investment

Smart-phone maker Realme is eyeing an increased presence in the offline space with standalone stores. Apart from ₹1,500-crore investments being made to tap the offline distribution channel, the company intends to double its India turnover to ₹30,000 crore this year.

Realme began its journey here as an ‘online-only’ sub-brand of Oppo, but has subsequently been spun into an independent entity. The brand sells close to 15 million devices annually with an ASP of ₹10,000 and is amongst the top five smartphone brands competing with the likes of Samsung, Mi, Oppo and Vivo.

According to Madhav Sheth, CEO, Realme India and Vice-President, Realme, the company has already established its offline presence across 200 cities through multi-brand outlets. The next phase of growth in expected from standalone stores. At least 500 such stores are being planned this year with an investment of ₹100 crore.

The company is also exploring various models that include company-owned and company-operated stores, company owned and franchise-operated stores or even a franchise-owned but company-operated stores.

Sheth told BusinessLine that the company plans to capture a 20 per cent market share by this year-end.

Realme has lined up 18-20 mobile phone launches this year as it aims to consolidate its presence.

Despite the growing dominance of e-commerce in handset sales, the offline channel or brick and mortar segment accounts for close to 65-70 per cent of mobile phone sales in the country.

“Considering the huge untapped offline market in India, brands have no other option but to focus on brick-and-mortar sales. Also, considering the recent hullabaloo over price disparity between offline and online channels, that is another aspect one has to look at,” an analyst said requesting anonymity.

Price parity

Incidentally, lobby groups like the Confederation of All India Traders (CAIT) and the All India Mobile Retailers Association (AIMRA) have been putting pressure on mobile brands and have threatened legal action if price disparity between channels are not done away with.

“We will maintain price parity across channels,” Sheth said.

The company is also focussing on tech offerings like internet-of-things (IoT) based connected solutions. It plans to launch fitness brands while some offerings like wireless earbuds have already been launched.

“The plan is to be a tech company with connected offerings. We are developing a software where one smartphone app will allow the user access across multiple connected devices,” he added.

Coronavirus threat

According to Sheth, although the coronavirus outbreak has threatened supply disruptions, Realme is better off with “own manufacturing facilities” and lesser dependence on third party manufacturing.

Nearly 50 per cent of its suppliers are from India —and these include the likes of camera module providers. The remaining 50 per cent is from China.

Realme has a manufacturing facility in Noida (Uttar Pradesh) with a capacity of 3.5 million devices a month. “We may look at expanding the facility in 2021,” he said adding that the facility could also be leveraged as an export base. Discussions in this regard are on. The company’s R&D facility in Hyderabad is carrying out global 5G trials, apart from making India-specific developments.

Published on February 19, 2020

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