Boost Indian Manufacturing
Boost Indian Manufacturing

Spice Mobility, which considers rural market as the most important market for them and are constantly making products that have the features and the price point, which consumers at large can afford, recently launched their future ready smart phones in the Indian market. Varun Jain spoke to Mr. Kunal Ahooja, Director and CEO, Spice Mobiles Limited, on the company’s future plans.

 Varun Jain (VJ): Is Spice Telecom, looking to manufacture in India?

Kunal Ahooja (KA): We have already started manufacturing in March. Our manufacturing unit is in Badi in Himachal Pradesh. The capacity of the unit by October would be 200,000 phones per month and by March about 80 per cent of the manufacturing of the sub $40 phone category, the entry level phones will be produced out here in this unit. Apart from this, we don’t have any manufacturing unit in India, but we have our strategic partners who are EMS (Electronic Manufacturing Companies), which are based in China and Taiwan, who make phones for us.


VJ: Do you think the manufacturing would pick up in the next 2 years?

KA: Yes, it would certainly. The government here has lot to do in terms of promoting the manufacturing out here. They have to create a strong hub for manufacturing. In fact, we are in talks with the government to create an environment where we could start component level manufacturing picks up. Like in China, where manufacturing is very strong, there is a strong community of the components manufacturer. Unless we have the component manufacturers also establishing, the manufacturing hub cannot be created in India. Right now we are dependent and we have been importing a lot more of components, so it’s not only about building the phone but also manufacturing the components.


VJ: Are you considering Indian Manufacturers who can supply the components to you?

KA: We would be glad to look at Indian manufacturers offering us the components. There are few of them who have started manufacturing, but again they are basic stuff and there is nothing that can be called sophisticated as in a camera module. They don’t make it. There is plastic and the chargers, the basic things which are being manufactured here. So we are yet to see a tier I component manufacturers, who builds a more sophisticated components like a camera module or a LCD panel, to set up shop outlet.


VJ: How important is rural market for Spice mobility?

KA: Oh, that’s really very important! That is from where we started in 2005 when we launched, from tier II tier III towns. But if you talk about rural, strictly rural, to the last end of the village, I think theres a lot more to do for a brand like us. We have to create supply routes into these markets. We are infact engaging with the customers in a big way in those markets and we are coming out with products that not only has the feature but also the applications in line to go with the rural taste.


VJ: How do you think the controversy surrounding Blackberry is going to create an opportunity for other manufacturers?

KA: I would really not like to comment on what happenend with the Blackberry. It is between the government and the RIL, but let us look at the opportunities it should create for us, you look at the kind of aspiration level ie. the demand. Everyone wants to own a Blackberry or a similar make phone. So QWERTY format phones have become very popular and Spice has launched 9 models in the same format. That is providing the consumer with a product that is much lower on the price point than a Blackberry. So a guy who aspires to own a Blackberry kind of a phone, we at Spice is able to provide him what he aspires for with a wide range of models. So in that case, you can see the opportunities that have been created.


VJ: Your take on the possibility of home grown brands taking over the giants like Nokia and Samsung? (Micromax has been able to garner a fair share of market in this segment for example)

KA: You need to understand this business. It’s much more complicated than you see it to be. What you do in one year and 2 year, is not going to determine your success. I can drop my price today and can gain the market share but does that mean I am going to survive in the business for long or would be I be able to over take a Nokia or a Samsung. There is a lot more that goes in to building a brand and being able to survive long term, and Nokia or Samsung are not a small company and so it would really take an effort to displace them at the top and its not that easy. We certainly have some advantages, the way we understand the Indian consumer, the way we can alter the features as per their requirement, but having said that it’s no cakewalk.  All the brands that have been mushrooming off late are all looking at the opportunities based on the products and the price. But then after sale service is also the backbone of your sustainability. You can replicate a product and the service but it takes year to build a after ales network. Let us just see what happens to these brands in a couple of years.


VJ: What kind of after sales service is provided by Spice Mobility?

KA: We have 11 component level repair center across the country. We have around 400 authorised service centers and we are building up our service network in such a way that it would become very difficult for anyone to replicate it. These are the things that would create a long term sustenance for us. We are not looking at the short term business.




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