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ADAG looks at direct sales to boost revenues
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The Reliance-Anil Dhirubhai Ambani Group (ADAG) plans to sell its products door-to-door. Until now, Reliance sold various products through its retail outlet, Reliance World. It had also commenced distribution of its own products last November.

The group now plans to sell mobile connections – both pre-paid and post-paid – along with handsets, data cards, wireless phones, mobile accessories, DTH connections and even rent DVDs through direct sales. The company will also knock on some corporate doors to sell its enterprise products, like video conferencing services and bulk internet connections.

Agents to get commissions
The direct sales operations will take off in April this year and the company will recruit 600 agents in the next four months. Initially, the new business will start in 100 cities and will expand to 600 cities in the next three years.

The direct sales network of the Reliance-ADA Group will be consolidated under its retail arm Reliance Webstore — a wholly-owned subsidiary of Reliance Communications — that owns the brand of retail stores called Reliance World. Direct selling agents will be operationally mapped to Reliance World stores and each store will have up to three agents.

The agents will be paid on a commission basis. Reliance Webstore will pay up to 50 per cent of the distribution margin it earns on its products to the agents on every transaction closed. Distribution margins on various products range between 5 per cent and 8 per cent. However, for its video conferencing product, Reliance Webstore will offer 20 per cent of its overall gross margin to its agents.

Profits to get a boost
The group expects the direct sales venture to boost profitability.

“The direct sales foray and its consolidation under Reliance Webstore is expected to result in substantial increase in sales and new customer acquisition. The channel is expected to provide an incremental 20 per cent business growth in the first year. Over the next three years, direct selling operations are expected to contribute nearly 50 per cent of gross bottom line,” Reliance Webstore CEO Sarup Chowdhary said.

Reliance has set a target of Rs 110 crore in revenues through direct sales, and expects two million handset sales annually through this venture.

Reliance Webstore, which has 234 stores across the country, broke even last year. It is yet another area of focus for the group. Over time, Reliance Webstores went beyond selling the group’s own products to sell mobile handsets that are not a part of any bundled mobile connections.

The company has also entered into an exclusive arrangement with Hong-Kong listed China Wireless’ Indian joint venture to distribute and retail its Coolpad brand of dual-SIM handsets in India.

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