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Vodafone India deploys bricks-and-mortar

News, 21 October 2015

MUMBAI: Handset makers like Xiaomi prefer the digital route to customers but Vodafone India's insistence on bricks and mortar has made it one of the country's leading retailers with almost 10,000 outlets.

The mobile operator has added 1,200 branded retail stores in the past 12 months, the Business Standard reported, taking its total number to 9,800. These attract 115m walk-in customers, a 64% rise since 2012, a period that has also seen a 24% increase in its subscriber base.

There are some 700 large units in the major cities offering a full range of services, 3,300 mini stores in larger towns with a similar array of functions and 5,800 rural stores – or lal dukaans – in small towns and villages.

The main reason for visiting a store is a new connection, while queries about internet plans and usage and smartphone applications are also common. Further, migrant workers and many pre-paid users prefer face-to-face interaction with a company representative.

Rachna Nath, partner and head of digital consulting at KPMG, also highlighted the value of such one-to-one contact in rural areas. There, he said, "the transactions are more relationship based and the brand becomes even more important".

The personal touch is something that Vodafone India has promoted within the business, encouraging employees to internalise the "Happy to Help" philosophy that lies at the core of its service promise. Several years ago, for example, it created Vodafone Tales, a coffee-table book featuring stories of "Service Champions".

And maintaining service quality levels has been a factor in expanding its physical presence through company-owned and operated stores, rather than going down the franchise route where standards can more easily slip.

Indeed, Rachna Nath, partner and head of digital consulting at KPMG observed that "a number of consumer companies who have retail footprint are buying the stores back from their franchisees" for precisely that reason

As a global company Vodafone is also able to import good ideas from its international presence, noted GV Giri, vice president at IIFL Institutional Equities.

These ideas find their way first into the company's Global Design stores, of which around 200 exist in the major cities.

Data sourced from Business Standard; additional content by Warc staff