In an interview to TNM, Univercell’s Sathish Babu recalls his early days, and the challenging years ahead for brick-and-mortar retail.

The eternal love for the sale Why South Indias mobile expert is unfazed by mighty e-retail
news Interview Wednesday, October 26, 2016 - 08:55

The interview barely begins, and Univercell’s Sathish Babu is already turning the tables. Instead of my questions kicking things off, it’s him throwing posers at me.

“How does the digital business work? What are the metrics? Who has invested in your company? How big is the team? How is the media business doing?” – He shoots out questions one after the other as I try to keep up with them.

For D Sathish Babu, Founder of South Indian mobile-phone retail chain UniverCell, the business side of his brain never shuts off, always trying to absorb numbers and understand models.

But it is one other aspect of business that he believes contributed the most to his success – the art of the sale.

The Mylapore Boy

Born in a middle-class family in Mylapore in 1966, Sathish studied at Vidya Mandir and Vivekananda College – a clichéd life trajectory of several others in that part of Madras. “I was taught the usual things – temple and bhakti, and focusing on academics. But I am from the Gangs of Mylapore,” he says with a hearty laugh, adding, “don’t mistake me for a Brahmin.”

Being the son of a used-car salesman, perhaps it was in his DNA, but Sathish’s romance with sales began when he had just graduated from the Mathematics department at Vivekananda College, and was preparing for the civil services exam.

He used to attend computer classes in the morning. And every day, he would see smart guys dressed in formals, giving high-fives to each other and riding bikes. He found out later that they were Eureko Forbes salesman, at their pre-sales meetings. “I heard that the money was great, but the pressure was also very high. I thought let me make some money, so I joined,” reminisces Sathish.

This would kick-off his ten-year sales stint, knocking on doors and selling vacuum cleaners and water purifiers. From being a salesman in the late 1980s, he went on to lead state-wide teams and train newcomers by the late 1990s.

He realized he was very good at selling. “I liked it a lot. It was a challenging job. I had to meet people, smile at them and convince them to part with their money,” he says, reservedly.

Prod him a bit more, and he gushes about it.

The love for the sale

“Selling is like an orgasm, man,” he says, “it is also depressing when you don’t get the sale. But when you get it, you feel like you are flying,” he says flapping his arms like wings.

In an almost teacher-like tone, he doles out his strategy, “I notice the eyes, where they go. If they are looking at someone else, that person could be the decision-maker. You have to bring them in as well. If the person is looking at the TV screen, you need to have the guts to ask them to switch off the TV. Converting a ‘maybe’ to ‘yes’ is the real deal.”

But it wasn’t just about the sale either, he says. He also enjoyed building teams and training salesmen. And as much as he enjoyed it, it toughened it up, he says. “We had targets to achieve. Sometime the boss would insult you. You have to be able to take shit.”

All these things gave Sathish the confidence to start his own company in 1997. The telecom sector was just beginning to bloom, and people were getting familiar with cell phones.

“I needed a name which was ambitious and yet simple, something a common person can understand and pronounce. So, I named it UniverCell,” he recalls.

On the recommendation of his friends, a few salesmen joined his team. His first office was a small garage in Royapettah, which belonged to his father. “I had to chase the tenants out, they were rats and pigeons,” he chuckles.

In 1997, selling mobile phones was not easy. “And it was not just buying the phone, they had to pay heavy bills every month,” points out Sathish. “It wasn’t enough if you had a car, you needed a shed too. Because if you could not even afford that, then how will you pay a monthly bill of Rs. 5000?”

Sathish and his team hit the road. They would go to companies and meet the big executives or owners.  As the telecom sector boomed, so did his sales numbers.

In February 2000, UniverCell launched its first store in Chennai, on TTK Road. “There was no parking space, and it was a Sunday. People told me all sorts of things, that no one will come as they relax on a Sunday or since there is no parking space. All of that was proved wrong. People found their own parking, the shop was full,” he says with pride.

In the first 10 years of UniverCell, it grew to about 10 stores across Chennai. In 2006-07, the turnover was nearly Rs 100cr, says Sathish.

And then, the floodgates opened up.

Booming all the way to e-retail

“When you are good, people come to you,” Sathish Babu remarks.

Investors flowed in. UniverCell was now growing at a feverish pace. Stores were being opened up across

South India. In 2011, they embarked on a massive marketing campaign which would go on for two more years. Actor Madhavan was roped in.

At peak festival time, each store was doing around 300 sales a day. “We opened a store in Pondicherry, and I had so much cash that the bank refused to take it in. I had to call their head-office and convince them to take the deposit,” he said.

By 2014-15, UniverCell had nearly 500 stores with a turnover of Rs 1000 crore.

But as this was happening, the e-retail tsunami was building up, threatening to engulf the shores of brick and mortar shops like UniverCell.

The e-retail tsunami

When mobile manufacturers saw that e-retail was booming, and that marketplaces like Flipkart were willing to put in their own money for discounts and drive up sales, they jumped to it. With loud marketing campaigns telling customers they can buy a phone from their own homes, people thronged to e-retail, away from stores like UniverCell.

In 2015, mobile retailers across India were reporting as much as a 40% downturn in sales. Stores were being shut, people being laid off. The bloodbath happened at UniverCell too. As of today, UniverCell has dropped down to about 200 stores.

“We had to cut down expenses to stay afloat. I had to let go of extra human resources and some high-end executives. Real estate costs were high, so we had to cut down on that too,” he rues.

But Sathish refuses to accept that the mobile e-retail game is fair, and demolishes each argument in favour of e-retail one at a time.

“Look at the ads on the newspapers today. What are they offering? It’s either EMIs, exchange or cashbacks. I have done all of that several years ago. My boys used to call EMIs as UMIs – UniverCell Monthly Installments – we had launched it with ICICI. There is nothing new in what online retailers are offering,” Sathish says.

But what about the ease of buying?

“What ease of buying?” he shoots back.

“There is a store in each lane now. If you come to the store, you can compare easily and have the touch and feel. Salesmen give you good advice. It is not an effort at all to go the store,” he says.

Does that mean that people are lazy? “No, people are being told buying phones online is easy, it isn’t,” he says,

“When you get to use the phone immediately after the buy, and I can deliver at your home within the hour, why wait for 3-4 days?” he asks. By now, the salesman in him is out in full display.

But does that mean that people are buying irrationally? “No. There is a very good reason they are buying online, and there is just one reason – its big discounts,” he says emphatically. “And it’s not just discounts, it’s big discounts.”

“There is a lot of noise now, people are being convinced that online buying is better. But that is not true. From pre-sale consultancy to after-sale customer service, we are the experts,” he says.

Sathish believes that when their discounts dry up, people will come back to retail stores. The government’s new rules barring e-retailers from holding inventories will also help brick and mortar stores like him, he says.

Meanwhile, he is learning from the past and exploring new opportunities.

“In hindsight, I realized that it is not the number of stores, but numbers from the stores that are important,” he says. All the frills are gone, and it is back to hard sales now.

From retail to e-retail, things are moving to V-retail he says, which is Virtual Reality at stores, he points out.

But his strongest advantage?

“I did not build my brand saying I am the cheapest. Our first tag line was “Where you buy matters”. And it still does. And when we are the best, people will get back to us.”

 

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