Yulong dials India through Reliance ADAG

Reliance Anil Dhirubhai Ambani Group (ADAG) is in talks with Yulong, China's largest dual mode handset manufacturer, to exclusively distribute its mobiles in India. Officials close to the development said the estimated valuation of Yulong's agreement with Reliance World is approximately Rs 600 crore. Reliance Webstore Ltd, the company that manages Reliance World chain of stores, will ink the agreement with Yulong.

"The discussions are underway and we are currently in the test marketing mode for two models of dual-mode handset brand, Coolpad. By the end of the year, we plan to add a total of five models," said Sarup Chowdhary, director and CEO, Reliance Webstore Ltd. The agreement is expected to be signed by October first week.

"We have approached Reliance ADA Group to retail and distribute our Coolpad dual handsets in the Indian market," confirmed Sami Al-Lawati, Yulong's spokesperson for the Indian market. As its long-term outlook in India, Yulong plans to focus on research and development and expand its high-end, dual-mode smartphone market share. The company has plans to offer newer CDMA-GSM dual-mode models, GSM-GSM dual-mode models, as well as CDMA single-mode smartphones in the Indian market.

As per an Accenture report, nearly 4% of the mobile phones sold in India are smartphones. The Indian smartphone market is expected to cross 20 million handsets by 2010.

The tie-up with Yulong offers Reliance World the opportunity to diversify into distribution of open market handsets. Open market handsets would not only provide Reliance World a new revenue opportunity, but also help expand its handset retail portfolio to over 250 open market handset variants and accessories across its entire retail operations.

Reliance World is also in talks with a number of other handset manufacturers to retail their open market handset range.

Reliance World is also looking to expand its retail footprint to cover 100 new towns (totaling 204 cities in all) over the next five years. "It currently operates on a purely company-owned-managed business model. In future, it would adopt the franchisee route to scale up its retail footprint and double its geographical presence by 2014," added Chowdhary.