"Make in India, design in India, customise for India' is our roadmap"

As India pipped US and became second largest smartphone market in the world and crossed the 100-million units benchmark, there’s a crop of dissuaded customers rising to reject run-of-the-mill innovations. Are Chinese phone makers ready to scale The Great Wall to concur India’s brutal phone market?

The strongly contested Indian smartphone market has seen many Chinese phone makers enter the country in droves; albeit in wait and watch mode, their prolonged presence could eat into the share of Indian companies. As India pips US to become second largest smartphone market in the world – according to Counterpoint’s Market Monitor service’s report – most Chinese players are now looking for avenues to leverage on India’s growth potential in the smartphone market.

The report further added that the smartphone shipments in India grew a healthy 15 per cent annually in Q4 2015 (Oct-Dec). During CY 2015, Indian smartphone shipments grew 23 per cent YoY to cross the 100 Million units milestone. Meanwhile, the Chinese brands that grew significantly during the quarter included Oneplus, Coolpad and Meizu. This year will be highly competitive as brands such as Huawei (with Honor), LeTV and Vivo expand with aggressive offerings to compete head-on with other Indian and Chinese players.

Ironically, the maturing market, tells another survey conducted by US-based technology major, Accenture, will notice a dip in sales in 2016. Consumers planning on buying phones dip from 80 per cent in 2014 to 68 per cent in last year, indicate the survey, citing reasons such as lack of innovation, price inconsistency and general exasperation with their devices.

Coolpad, the Chinese handset maker that entered India last year, is partnering with Videocon to assemble its handsets here while looking at setting up its research and development (R&D) operations here to cater to the Saarc region. Retailer caught up with Dr Johnson Luo, Global Vice President, Overseas Business, Coolpad Group and discussed themes across the phone maker’s India strategy, innovation and Global competition. Some excerpts:

Why has the name Coolpad remained virtually unknown in the foreign markets despite a rock solid performance in the Chinese market?
I can’t agree to that. Coolpad is one of the largest Chinese brands in the global market. We have a foreign market presence as early as 2006, and switched to an aggressive mode since 2015. Right now, we covered 28 major cities of Indonesia with more than 1000 selling points. The success in Indonesia helped us to further explore Southeast Asia markets, including Vietnam and Philippines. So far we have launched five models there.

On September 17^th, we launched our brand in Prague, Czech. This month we launched a new product in Barcelona, Spain, which marks our breakthrough in Western Europe. In United States, we have become a major supplier for T-Mobile and Sprint. With 4 million sales volumes in 2015, we have become the fastest growing brand there. Africa and South America business is also settled to start.

How do you look to spread out the brand’s visibility in the Indian market? Your smartphones are affordable and offer decent specs, could these factors alone work for you in India?
No. Launching products at a competitive price is just the first step. It helps us to reach more customers and increase Coolpad’s brand visibility. As per our strategy, we give India market the priority for the best product. We do this is exactly because we know that affordable price with decent specs alone can’t make a brand successful. As the brand grows, we will invest more and launch products from middle- to high-end range. In 2016, we will launch 4-6 products including some flagships products. Customers will know that we are not only great on cost performance, but also leaders in innovation and security. In the long run, we will be more localised in the Indian market to establish a full supply chain here starting from R&D to manufacturing and distribution. 
Going forward, we want to bring our global expertise here to capture 5 per cent share in the smartphone market space in India. ‘Make in India, Design in India, customised for India’ is our roadmap. We have achieved the first step through cooperating with Videocon to ‘Make in India’. At the moment we plan to continue our presence in the online space and also actively seek offline partners at the same time. In terms of market scale, Indian market will soon become another Chinese market. Hence, India is the strategic focus point for Coolpad. Therefore, the group will give full support on investment and resources to Indian market. We can capture 3-4 per cent by H1 2017.

At one point you were lagging behind in terms of numbers in your home market, how did you manage to increase your market share?
The advent of the intelligent age has sped up the reshuffling of China’s mobile phone industry, and every technological upgrading and advancement is an opportunity for Coolpad. Now the company is leading the 4G market in China with cutting-edge products, thanks to its continuous investment in R&D. In addition, Coolpad has made forward-looking deployment of intelligent hardware and 5G well ahead of the competitors.
When the 5G era arrives, Coolpad will be able to provide products better meeting the consumer needs. In the meantime, we are intensively cultivating the channels. Apart from distributor channel enhancement that the company started years ago, it will also bolster construction of open channels such as the Internet, while solidifying all different channels in the pursuit of better reputation and sound-basis channels.
Coupled with the escalation of its technology capability, the company will harvest steady development in branding and channel construction. In the Indian market, more than 57 per cent consumers still use feature phones, they are potential buyers of smartphones, and therefore their purchasing choice will be more and more attached to the brand competence on innovation and technology, which is our specialty. Our experience in China will be used for India market soon. We will first shape our brand through our online presence, and further expand and grow through our offline model. By constantly seeking high-market breakthroughs, we strive to capture a greater market share and to become a China-grown world-renowned telecommunication brand.

What is your shipment target for the current year?
We intend to ship about 3-4 million units in the current year.

How many phones do you sell in a year globally?
I can’t tell you the exact number of how much we sell each year. Different market survey agencies rank us differently. But I can share with you our goal of sales volume for 2016, which is 45 million pieces.

What’s the revenue you are expecting from India in the next 5 years?
Going by our product ASP in the last and current financial year, we aim about $20 billion in revenues in the next five years.

How will you compete with high-end premium phones like Samsung and Apple?
Samsung and Apple both have large product portfolios spanning across devices such as PC Computers, Laptops, Tablets, Smartphones etc. Coolpad has all its energies focused on smartphone technology and building an ecosystem around that. Also, these brands have built customer goodwill and increased their market share over a long period of time, spending billions in ads and marketing campaigns. Coolpad started with a mission of bringing innovative and affordable technology to the masses and eventually transitioned into the top three brands in China. With over 6000 patents in technology and R&D centres across the globe, we continuously improve our industrial manufacturing capacities, including multi-products, multi-channel and complete product line coverage.

Huge escalation in the brands entering via online channels can and will be seen, how would you respond to the massive competition going forward?
There is a huge escalation in demand for products going on sale via online channels. It is relatively easy to sell products online in comparison selling them via your own stores. Our brand has an advantage due to its strengths in manufacturing and R&D, which in turn helps us gain an edge over white labelling entities. The only way a brand survives is by delivering quality products at affordable costs. We are just two products old and have already received great reviews from both the consumers and the media.

What’s going to be your investment in the mobile phone business in India?
Coolpad has provisioned a 300$ million investment for the Indian market for the next three years; this is broadly divided towards R&D, manufacturing, branding and marketing operations.