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Reliance Infocomm's Retail Emphasis

Ever wonder what made Reliance Infocomm shift attention to the retail channel?

By Vandana Gombar

If things had gone according to plan for Reliance Infocomm, you and I would have discarded our Airtel, Hutch, Idea or whatever other cellphone services by now, and switched to the joys of making supercheap long-distance calls and watching streaming video clips on Reliance IndiaMobile, the service that was promising to turn the market on its head.

It didn't happen. The evidence is in your pocket.

What has changed, meanwhile, is Reliance Infocomm's approach to the market. Five months ago, market watchers were agog with talk of Dhirubhai Ambani Entrepreneurs (DAE). Now, they're agog with the company's WebWorld retail stores.

What's up? It's a shift in sales-channel emphasis, and a major one for sure. The original idea was to storm the Indian mass market with a compelling value proposition sold person-to-person by a vast network of wannabe entrepreneurs in the guise of salespersons (a la Amway's network marketing model). With such a fantastic deal, reckoned Reliance strategists, crowds and crowds would come swarming to sign up - as customers, and even as entrepreneurs seeking to profit from the swarms. This, remember, was a mass-market initiative.

Well, as it turns out, Reliance Infocomm did become the prime word-of-mouth topic for the season, and the swarms did materialize. But to wave angry fists at the brand, not to sign up for the parental privilege of putting children to bed with mobile-phoned bedtime stories (nice TV spot, that, pity about the rest).

What went wrong? Was it the service proposition? Or was it the way it was made? Both, as Reliance now believes.

The biggest let-down was the mega-commitment money that a customer was being asked to put down. Anyone drawn by talk of 40-paisa-to-the-minute long-distance charges would balk at the thought of paying Rs 20,000 to get going. There were deferred payment plans too (requiring post-dated cheques), but that didn't change the basic fact that a service that had been trumpeted as Dhirubhai's envisioned 21st century replacement of the humble postcard, was actually as difficult to buy as a colour TV set. Now, that's a shock of teeth-rattling magnitude.

Even otherwise, the very service ceased to be attractive the minute it ran into regulatory hurdles ('limited' mobility is technically forbidden in outlying suburbs, for example). Meanwhile, price-cuts by the entrenched GSM players eroded the regular cost benefits that IndiaMobile was offering. Then, there were technical glitches, resulting in disappointing service trials. Worst of all, customers weren't given enough time and space to do the touch-and-feel thing and familiarize themselves with the trappings of the service. It was a simple wham-money-here-thankyou-ma'am operation, leaving the customer gaping to see whether all those post-dated cheques had vanished down some black hole. And if that wasn't bad enough, the actual service activation was to come only a fortnight later. This was enough time for post-purchase dissonance to wreak havoc in the mind.

And to think that Reliance Infocomm actually expected 5 million customers in two short months. This target was set on the premise of a rapid fan-out of the DAEs. But as it happened, this was a perfect way to destroy channel quality at the very onset. The DAEs only added to all the confusion. There were just too many people out there saying too many different things about the IndiaMobile deal. The lack of coherence was shocking. The DAEs were simply too clumsy. IndiaMobile's 'kabhi mobile, kabhi computer' tag didn't help matters either, since it complicated things much more. At the end, it was one royal din. Babble, babble, babble... blah, blah, blah.

The truly admirable part, however, is the speed with which Reliance Infocomm has switched strategy. "It's not as if nobody makes mistakes," was the candid admission from Reliance Chairman Mukesh Ambani.

The company has snapped off its non-performing DAEs, and has set up 100 WebWorld retail outlets already, with another 150 more to come by the end of May. The target now is to have at least 686 such outlets -- at least one in each of the 673 Indian cities and towns that the brand intends to service.

Meanwhile, Reliance Infocomm still has to work on brand dissonance. The brand's image has already got horribly fragmented, representing something to someone and something else to someone else. Presenting a unified face ought to be the marketing priority, and that means bringing coherence to the message. The brand has much to live down.

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