India is the third largest mobile phone market in the world, widely tipped to become the second largest. Mobile phones and tablets are our fastest moving retail categories. Counterpoint, a technology market research firm, said of the data gathered for Q2 of 2014 that Indian brand Micromax had become the leading mobile phone brand in the country with 16.6% market share, overtaking Samsung (14.4%). They are followed by Nokia (10.9 percent), Karbonn (9.5 percent), and Lava (5.6 percent).
The Indian market for smartphones also saw strong annual growth of 90%, with 21.6 million units shipped in Q4 of 2014. In a report issued on Feb. 3, 2015, research firm Canalys said Micromax had grown its market share to 22% of the smartphone category in the same quarter. This was ahead of Samsung’s 20%. Micromax thus took pole position in the overall mobile phone category as well as the smartphone category. Canalys also stated that the Indian budget smartphone brands, Karbonn and Lava occupied third and fourth positions respectively.
This is a very interesting juncture to be in for industry and retail in India. There was an impression in the initial days that the desi bands were low-quality, ‘fly-by-night operators’, but with quality improving and brands strengthening, the numbers speak for themselves. Indeed, India seems to have spoken. In Uber Stories today, we focus on the 3 home-grown mobile phone brands and explore what makes them tick.
Teetering between trying to ‘Make in India’ or manufacturing a majority of their components in China, Vietnam, etc. the Indian brands are intrepid entities who understood the demands of the market and follow agile practices to bring cost effective, feature-rich phones and tablets to the larger Indian market. Smart pricing is really the winning strategy for all three brands. As stated by Karbonn MD Pradeep Jain, “The Indian consumer is quite complex and wants everything – a good product, from a good brand, at a good price…”
In India, low-priced smartphones are incredibly popular as a chunk of buyers are upgrading from feature phones. It is this segment that is the primary target of the local players who follow a strategy of releasing a wider range of models at various price points to tap into different market segments. Another characteristic is that for a given set of features, the price point of such phones is half that of a comparable international phone, on average. This has resulted in an increasing dominance of the price-sensitive domestic market. While targeted advertising, energetic marketing campaigns and sponsorships of popular sports events have raised their profiles. An entire eco-system of vendors, distributors, marketers, etc. has grown around these home-grown brands that have a significant impact upon the economy.
Micromax Mobile produces smartphones, feature phones, datacards, tablets and televisions. In August 2014, Micromax beat Samsung to become the leading mobile phone vendor in India in terms of market share, a position that was further solidified by the February 2015 finding by Canalys that it had taken pole position in the smartphone segment as well. According to Micromax themselves, they are the “10th largest mobile phone player in the world.”
Founded by Rajesh Agarwal, Vikas Jain, Rahul Sharma and Sumeet Kumar, Micromax is steered by CEO Vineet Taneja and Chairman Sanjay Kapoor. The company started as a telecom equipment distributor in 2000 and entered the mobile arena in 2010. It was considered to be a negligible, low-cost handset maker with a 0.59% market share, until they brought out the Canvas series. The first such device, the A100, modelled on the Samsung Note series was a great hit. Building on this success Micrmax then launched the best-selling Canvas 2.
Micromax phones are seen as perfect companions for the aspirational, irreverent youth of India. An identification helped along with clever ads and a smart endorsement strategy, which roped in Twinkle Khanna and Akshay Kumar and even the international star Hugh Jackman. Added insight into their strategy comes from an interview in which former Micromax CEO Deepak Mehrotra told Firstpost, “The way we look at our customers is we keep micro-segmenting it. … you need to understand the customer’s specific need and … create a product where the specific need of the customer gets addressed.”
Micromax thinks deeply and differently. It introduced handsets with 30 days of battery backup (X1i), it introduced dual-SIM dual standby handsets, and a handset that could switch between GSM and CDMA networks (Gravity X600). The X40 dual-SIM phone actually came with an inbuilt projector. Micromax has contributed to the ‘democratization of technology’ in India with its affordable solutions. It’s wide-spread distribution network has also played its part. For phones and tablets, the company has put together a three-tier distribution set-up. This includes 80 large partners, 2,500 small partners and 125,000 small retail partners in more than 560 districts throughout the breath of India. Micromax also boasts an international footprint in Russia and the SAARC countries.
According to Canalys Analyst Rushabh Doshi, “Canalys believes catering to local market preferences will become increasingly important. Micromax has been quicker than its competitors to improve the appeal of devices, for example, by including a wide variety of local languages on its Unite phones.”
Established in April 2009, Karbonn Mobiles produces smartphones, feature phones, custom apps and tablets. According to the latest data by Canalys, in Q4 of 2014, Karbonn’s smartphone market share was 9.3%. Part of the Android One initiative with the Karbonn Sparkle V; by Q4 of 2013, Karbonn had a diverse product portfolio of over 225 phones and over 65 smartphones. In 2014, Karbonn was listed as the 77th contender among 1200 of India’s most trusted brands in the Brand Trust Report 2014, brought out by brand analytics company Trust Research Advisory.
Karbonn is a joint venture between Bangalore-based United Telelinks Limited and Noida-based Jaina Marketing & Associates. For Managing Director Pradeep Jain and Chairman Sudhir Hasija, Karbonn Mobiles was the fruition of their conviction that it was better to own one’s own mobile phone company than acting as distributors for others. In a piece in The Economic Times, Pradeep Jain stated, “Having a huge dealer network in place, we were able to keep track of the market pulse and this is how we realised that the time was ripe to introduce our own brand.”
The business partners had an association of 10 years before they started Karbonn Mobiles in 2009. The company began operations in 2009, by bringing out simple feature phones. They gradually moved on to smartphones and tablets. These mobiles are actually made in China, Taiwan and Korea, though product designing and testing is done in India. There are plans to start production in India as well if government policies prove favourable.
Karbonn has been instrumental in bringing cutting-edge mobile technologies to India. The aim is to ‘Massify Technology’ with a portfolio of innovative user-centric ‘Smart’ Devices at smart prices. It is said that the company aims to replicate the Maruti model – with respect to after-sales service and sheer scale. Karbonn responds quickly to minute changes in the market and customer sentiments and has one of the fastest rates of phone launches in India. They also advertise heavily to grab customers’ attention.
As reported in Firstpost, Pradeep Jain, Managing Director, Karbonn Mobiles stated, “Our aim is to usher in a new revolution … thus creating a new wavelength wherein Karbonn Mobiles can demonstrate its technical stewardship.” On the subject of the rural consumes of Karbonn phones, he further stated, “We are also trying to make it as user friendly for them as possible – by incorporating things as simple as local languages and software which they can use to communicate with the rest of the world without the burden of illiteracy.”
There have been many partnerships and deals struck by Karbonn. Notable among those are associations with Microsoft as a hardware partner for the Windows Phone operating system and Google for the Android OS. On the entertainment front have been associations with Eros International for the film Kochadaiyaan and Hungama.Com for an app.
Karbonn has a presence in India and abroad in approximately 40 countries. Over the years Karbonn has built an enviable distribution network which includes 15 plus eCommerce partners, 17 plus retail partners as well as teleshopping partners like StarCJ, Home Shop 18 and Shopping Zone.
Lava International Limited was founded in 2009 by Hari Om Rai, Sunil Bhalla, Shailendra Nath Rai and Vishal Sehgal. According to the latest data by Canalys in Q4 of 2014, Lava’s smartphone market share in India was 7%. “We can grow much faster in the coming years. Now that we have built the company over the past few years, the next 10 years will be the years of success,” says Hari Om Rai, Chairman and Managing Director, Lava International.
It is indeed one of the most dynamic mobile handset companies and India’s 5th most trusted mobile handset brand according to the Brand Trust Report 2014. It was selected as the “Emerging Company of the year 2013” at the Voice & Data Telecom Leadership Forum Awards. Profitable in the first year of operations itself, Lava has its own R&D centre in Bangalore. Speaking to NDTV, Arvind Jha of Lava stated, “As a brand we believe we must bring better quality, better reliability, better experiences to our consumers.”
The parent company oversees two brands: Lava and Xolo. LAVA has an extensive portfolio of tablets, feature phones
and smart phones in bar and touch form factors at multiple price points catering to multiple categories of consumers. Within the LAVA brand are series of phones like the Android IRIS smartphones, the Discover series, the bar phone Spark series and ARC & KKT series.
XOLO is a more premium brand for the mid to high-end smartphone segment, which was started in early 2012. XOLO phones provide best in class technology and stylish looks. There have been partnerships with Intel®, NVIDIA®, AMD and Qualcomm® amongst others, to provide a superior experience to discerning consumers. XOLO launched the world’s first Intel® processor powered smartphone, the first NVIDIA® TEGRA® 4 powered tablet in India and was the first to create its own UI called HIVE.
“Being one of the fastest growing handset vendors, Lava has witnessed growth in both its brands i.e. Lava and Xolo. Both the brands are currently treated as independent lines of business in the market place,” says IDC in its latest report. Lava aims to more than double its revenue to $1 billion, or about Rs 6,300 crore, from Rs 2,909 crore in the previous financial year.
What’s next is an investment in emerging technologies like The Internet of Things (IoT) as well as launch a range of affordable LTE (Long Term Evolution) smartphones in the next two months, which will be priced between Rs 5,000 and Rs 15,000. Moving to the hyper-local, in March 2015, Lava will also start on Made in India smartphones with a production facility in Noida.