Reliance Retail, Samsung sign pact for after sales service

KOLKATA/NEW DELHI: Reliance Retail has entered into a partnership with Samsung to manage its after-sales service, a precursor to the Mukesh Ambani-owned firm’s bigger plan to form similar alliances with almost all top electronic, computer and phone makers to become the country’s largest one-stop consumer electronics installation, maintenance and service venture.

The deal between Samsung and Reliance resQ is the first such pact that the Indian company has signed, with a pilot having begun in Pune. Reliance resQ is envisaged as another of the group's big consumer facing businesses alongside retail and will play a crucial role when Reliance launches nationwide 4G mobile services, said a person aware of the plan. This is part of Reliance’s strategy of becoming the conduit for the vast range of service contracts a home needs — from electronic items, kitchen appliances to phones, computers and laptops, he said.

“However, it will not be easy,” this person said. “It is a people-driven industry where Reliance has to constantly skill and re-skill technicians and keep them motivated,” he said. Nearly 2,000 people are already working at Reliance resQ and the company wants to raise the headcount to 10,000 in two years.

Reliance is trying to emulate US electronics retail giant Best Buy's Geek Squad that customers call for tech support and services irrespective of where they bought a product, said the person cited above.




The company is in talks with the country's largest white goods makers such as LG, Videocon and Godrej to provide after-sales service, according to two officials aware of the development. The resQ unit currently provides service back-up only for products sold through the group's electronic retailing venture, Reliance Digital. It wants to extend this to all kinds of warranty and out-of-warranty support for products purchased from other retailers as well.

In response to a questionnaire, a Reliance Retail spokesperson said that resQ plans to offer its service expertise through various initiatives and partnerships in order to drive better value for consumers and brands. A Samsung India spokesperson, however, declined to comment.

In the last quarter, Reliance resQ launched a comprehensive homecare plan for all electronics, home appliances and digital products in a household. It is aiming for a pan-India footprint in the coming months from the 43 service centres in 36 cities at present.

Some experts are doubtful about Reliance's plan to put in place an alliance with companies throughout the country given the significant shortage of qualified, skilled staff for repair work. Two senior executives at leading home appliance brands also expressed their reservations about the plan.

The Indian company that one of them works for intends to control its after-sales network through existing channels and not offer it through any entity that's going to handle multiple brands, said the executive. "There is a risk attached since the service provider in this case can distort the consumer's brand loyalty by pitching for other brand products," he said, requesting anonymity. Several consumer electronics companies have begun investing in company-owned service centres to maintain direct contact with consumers.

"A multi-brand service partner concept prevalent in the West may not work in a country like India where the consumer base is huge and the number of models sold for a particular category too are more," said the second executive, who also requested anonymity. Besides this, service contracts and repairs form a substantial source of income for electronics companies, with manufacturers such as LG having built customer loyalty with the efficacy of their after-sales network.