Micromax, Lava, Spice, Zen, Karbonn and many other Indian handset brands are making more than a mark in the market today.
They have together occupied more than 14% market share. The best part for them is that this has been at the cost of certain brands specifically Nokia losing its market share by more than 12% over the past year. So the question is what makes them tick and will they be able to survive?
Most of these handsets can be sourced from China at as low as US$ 16 with a 1% duty and at prices half that of the multinational brands. The cheapest handset also offers a good margin. But competition is increasing thick and fast. The question remains as to how well these brands differentiate their offerings.
But at the end of the day, the biggest factor which attracts people is the price. Before Micromax came with its QWERTY phone for Rs 5,000, such phones weren’t available for less than Rs 10,000. Lava as well as Micromax is working overtime to launch 3G as well as smart phones for less than Rs 6,000.
The most interesting aspect of their strategy is that they are targeting villages first, 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 has helped them gain a good market share in these areas. Spice claims to have 18% market share next only to Nokia in Rajasthan. A new entrant, MVL plans on using road shows as part of its marketing campaign. It also plans to sell its phones through post offices.
Technology has also been an important factor for these brands to develop themselves strongly. An in–built mosquito repellent, long–life batteries, dual SIM card reader, fake currency reader… they have it all. But the most important part to succeed in this highly competitive game is to innovate and that too quickly and faster than your competitors. Companies should search for newer methods of continuously reducing the product development cycle.
These brands have also signed onto many Bollywood stars as their Brand Ambassadors as well as invested heavily in cricket especially the Indian Premier League [Micromax]. This is what sells in India and they feel that they could differentiate themselves by this move.
The long term success of Indian handset brands depends on their differentiation, competency in smart phone development and also a strong supply chain. Foreign brands have already dismissed their competition saying that they don’t have the ability to effectively compete.
But all in all the entry of these new brands has made the market all the more interesting to look forward to in the coming years.
Do you think Indian handset brands can give their foreign ones a run for their money?