It was not long ago when the fight to the top slot in the mobile segment in India was between major phone manufacturers like Nokia, Samsung and Sony. Although these brands are still going strong in the Indian market, the growing demand for domestic brands, such as Micromax, Lava, Karbonn, Zen, etc, cannot be overlooked. These domestic players, who entered the market without any publicity a few years ago, have gone on to understand the deep dynamics of the mobile industry to such an extent that they now command a good reputation in Tier II and III cities and together occupy more than 14 per cent market share.
Micromax was the first domestic brand to enter the highly-competitive market in 2007. The brand offers more than 60 models today, ranging from feature rich, dual-SIM phones to QWERTY, touch-enabled smart-feature phones and 3G Android smartphones designed for younger consumers in suburban and urban markets. A telecom venture of three renowned entrepreneurs, S N Rai, Hari Om Rai and Sunil Bhalla, Lava made its debut in 2009 by launching three handsets initially. Karbonn, a joint venture between Delhi-based Jaina Group and Bengaluru-based UTL Group, also entered the Indian market in 2009. Today, Karbonn offers close to 30 models.
Triggers for growth
These domestic brands provide attractive features like QWERTY keypads, MP3 players, long battery back-up, dual or triple SIM card slots, add-on memory card slots, and elegant looks, style and finish at competitive prices. This poses a huge threat to the established brands.
A leading analyst at IDC feels that the growth of Indian handset brands is on account of four key reasons. First, they recognised the customer’s need for a dual SIM category. Second, homegrown brands have the advantage of launching handsets. Nokia, at its peak, could not bring out more than one “hero” product a month, whereas the Indian players are able to launch handsets at a much faster rate. Third, the ability of local brands to tap into the Tier II and Tier III markets, which is where the real subscriber growth is happening. And finally, the price-points at which the products of these are retailed, works to the success of the brands.
Before Micromax came with its QWERTY phone for Rs 5,000, such phones were not available for less than Rs 10,000. Lava as well as Micromax worked overtime to launch 3G as well as smartphones for less than Rs 6,000, which has made a great impact.
The most interesting aspect of their strategy is that they are targeting villages first and cities later. They want to build a strong user base first, where they have a greater opportunity. Poor recall of multinational brands in rural India and the price factor have helped them gain a good market share in these areas.
According to the recent CyberMedia Report, the overall India mobile handsets market recorded sales (unit shipments) of 183 million units in CY 2011, wherein Nokia retained its leadership position with 31 per cent share, followed by Samsung at the second spot with 15 per cent and Micromax at the third spot with 5 per cent, which clearly highlights the progress made by Micromax as a brand. “The fact that Micromax is counted among the top 3 brands in the country encourages other manufacturers to be ambitious,” says Naveen Mishra, Lead Telecoms Analyst, CyberMedia Research.
Strategies for success
The evolution of Micromax from what it was to what it is today must be regarded as a great case of marketing. On the other hand, Lava International reveals that the company’s main thrust strategy revolves around three verticals simultaneously—sales, after sales service and R&D. “We are not in the business of just driving sales but we also believe in customer satisfaction through after-sales services. Today in India, after-sales services are mostly outsourced to a third party, but Lava has established its own service centres,” Sehgal adds. The company’s strategy is to offer power-packed, functionality-rich handsets suitable for every pocket, which gives an impetus to the brand.
Hitting the right chord
With close to 150 models available in the market across different regions in the country, these domestic players cater to various sections of consumers. “Micromax is a young, innovative and a dynamic brand. The country is full of young, restless heads, who want technology at the tip of their fingers. We cater to the youth who is tech savvy and has an affinity for innovative products. We sell around 1.3 million mobiles handsets every month,” says Pratik Seal, Marketing Manager, Micromax.
“We cater to almost everyone with our product offerings. Our main focus, however, has been on the Tier II and III cities,” says Vishal Sehgal, Co-Founder & Director, Lava Mobile. Karbonn reaches out to people across the length and breadth of the country, enhancing its penetration and reach and creating a name for the brand. Most of the Indian brands have made a mark by showing innovation in designing their products as well as making them easy-to-use and affordable.
Lava has already expanded its operations in all the states of India and has a network of 1,000 distributors and presence in 50,000 retail counters. Micromax is present in more than 500 districts through 100,000 retail outlets in the country. Karbonn, as per the company statement, has achieved a distribution footprint of over 90 per cent coverage of the districts with more than 10 million devices sold. The brand already has over 550 service centres established across the country and a network of more than 50,000 outlets.
Slow but steady
While these brands are growing at a rapid pace, experts say the growth is insignificant if we compare it to the mobile giants. “Micromax has a market share of 5 per cent against the likes of Nokia, Samsung and Blackberry, while Lava, Karbonn and others are nowhere to be seen,” says Mishra. According to most tech experts, it will take some beating to be actually counted among the top brands in the country. What is in their favour is the fact that the trend is yet to reach its optimum. Experts say though these brands are growing slowly, but if they continue to keep their approach right, it will not be long before they find a steady growth curve.