Reliance Webstore, a retail arm of the Reliance ADA Group, has signed strategic pact with China's Coolpad Communications to market and distribute latter's dual-mode smartphones in India.
Coolpad Communications is a subsidiary of China Wireless and the agreement marks its foray into the Indian market.
Coolpad will invest over Rs 400-crore over the next three years towards the company’s capital expenditure plans as also for operational requirements. The funds will be raised through internal accruals and debt.
According to a press note issued here, Coolpad is setting up a dedicated R&D unit in Shenzhen, China, and one more in India to strengthen its relationship with ADAG.
The units will liaise with Reliance Webstore teams across India to seek customer feedback and develop products for the Indian market.
"Given our unique strengths in the dual-mode and 3G segments, we envisage a major upside for Coolpad as Reliance Webstore enters the handset distribution business in the backdrop of India’s emerging 3G scenario," China Wireless' India Head, Sami Al-Lawati, said.
The Coolpad smartphones are expected to contribute over 30 per cent of the overall handset sales at 232 Reliance World Stores across 104 cities in India.
ADAG has also introduced the 'Hub-and-Spoke' model for the first time in the country, to leverage Reliance World stores to act as distribution hubs for its handsets.
It diversified into handset distribution business in addition to its current focus of handset retailing through Reliance World and Reliance Mobile stores, the release said.
The company has already signed-up more than 1,200 handset retailers and Multi-Brand Outlets (MBOs) in nearly 100 towns.
"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 efficiencies in the istribution chain,” Reliance Webstore's Director and CEO, Sarup Chowdhary, said.
Reliance Webstore is targeting a distribution network of over 10,000 multi-brand outlets (MBOs) and retailers spread across 700 Indian towns in the next three years.
Presently, the telecom retail business contributes over 50 per cent to Reliance Webstore’s annual revenues and the new model is expected to further augment this share.
The company has been focusing on growing this business further by entering into strategic global agreements with handset manufacturers, retailing of open market handsets and geographical expansion of its retail operations.