MADE IN KARNATAKA: Subhash Chandra’s Sangeetha stands up to Flipkart, Amazon

TNNSubhash Chandra knows a thing or two about struggles. His father started a store on JC Road in Bengaluru in 1974 to sell gramophone records, and small appliances including mixi, radio and fan. He named it `Sangeetha’ or music

BENGALURU: 

Subhash Chandra

 knows a thing or two about struggles. His father started a store on JC Road in Bengaluru in 1974 to sell gramophone records, and 

small appliances

including mixi, radio and fan. He named it `Sangeetha’ or music.

The shop was small and, having lost his wife early on, his father did not feel the need to get another home in a city where he had been transferred to when he worked with a Chennai company named Vijay Home Appliances. "For four years both of us slept in the store," recalls Chandra. They had all meals at the 

Kamat

 near Minerva Circle. Chandra ironed his clothes and did his homework on the store’s counter.

The store did not do well, even though it was, along with the 

HMV

 stores in the city, quite hot among music lovers. 

Sangeetha

 was put up for sale. But nobody came forward to buy it. "My father's friends used to say that he was too straightforward to be in business."

So Chandra, barely 17 then, decided to step into his father's shoes. His father rejoined Vijay Home Appliances in Chennai. Chandra added televisions and cassettes to the mix. And as TVs became a household necessity, the business gradually turned around.

Then came computers and pagers. And in the late 1990s, mobile phones. Mobile phones were then mostly sold in the Burma Bazaar grey market because of the huge customs duties. Chandra says he was the first in the city to start selling these phones with a bill and warranty.

"The margins on SIM cards then were huge, which helped us to subsidise the phones. We convinced people to buy a phone and SIM together. We also bought stocks in bulk to get better prices," he says.

Many celebrities in the city would buy from him. Bulk orders from corporates followed – Oracle, Sun Microsystems, Infosys, Microsoft, PwC. “Oracle bought from us for all their requirements across India.” In 2001, Sangeetha became a mobile-only store. Chandra believes he was among the first in India to start an insurance scheme and EMIs on phones. “Within three days, I would pay the insurance amount,” he says. These had a dramatic impact on the Sangeetha brand.

Today, Sangeetha Mobiles has an annual turnover of about Rs 1,500 crore, 500 showrooms across 8 states, and 2,500 employees. It sells 1.4 million phones a year – making it one of India’s largest offline mobile retailers.

But even the mobile journey had several troughs and challenges. In 2002, Chandra launched a mobile brand on the CDMA platform. But CDMA collapsed, and so did this initiative. A decade later, seeing the success of Micromax and Karbonn, Chandra launched a brand called Wham. But even that fizzled out in three years. “We lost a lot of money. A brand is a difficult business. We needed to set up a manufacturing plant,” Chandra says.

Perhaps the biggest challenge came four years ago, from online retailers like 

Flipkart

 and 

Amazon

, with their massive discounts and ready availability of a vast range of phones. Sangeetha’s sales grew just 5% in 2014-15, and then fell by 20% the following year. "They almost killed us through berserk pricing," he says.

But things have improved in the last one year as online retailers – because of governmental regulations and pressure to cut losses – have been forced to raise prices. Sangeetha’s prices are no higher than the online ones for most brands and models. And Chandra has continued to innovate. He is particularly proud of his price drop protection scheme, under which if the price of a phone drops within 30 days of a customer’s purchase, the customer is reimbursed the difference. The scheme, started three years ago, has seen the company return Rs 12 crore to 122,000 customers till date.

Such schemes have drawn people back to stores. Sangeetha’s sales grew 79% last year. And Chandra is drawing up major all-India expansion plans.

Early struggles, innovations pay off

* Lived in the store with his father for four years in his childhood

* Perhaps the first in Bengaluru to sell mobile phones with bill & warranty

* Among the first major suppliers of mobile phones to companies in India like Infosys, Oracle

* Among the first in India to offer insurance and EMIs on phones