Chinese brand Xiaomi may have managed to sell 10,000 phones in just five seconds in an online sale in India recently, but it’s the home-grown players who are keeping local buyers absorbed. India is clearly at the centre of a smartphone revolution, having registered a 186 per cent sales growth in the first quarter of 2014 over the same period in 2013. But if you think foreign brands and their expensive handsets are driving the growth, think again. Five of the country’s top 10 best-selling smartphone slots are occupied by local players: Lava with Xolo model accounts for two positions; the others are taken by Intex, Micromax and Karbonn. Indeed, over 60 per cent of the 14.5 million smartphones sold in the country between January and March were made by Indian companies, says CyberMedia Research (CMR).
After Samsung, which maintains its leadership position with a 43.2 per cent share, Micromax (17.5 per cent) and Karbonn (10 per cent) occupy the second and third spots. Lava, with a 5.5 per cent market share, clocked a substantial Rs 2,909 crore revenue in FY13-14, and expects to cross Rs 6,000 crore this year.
The locally-made handsets compete with global brands in looks, technology and, most importantly, price. Last month, Indian handset maker Celkon launched a Campus A35K smartphone for Rs 2,999 in an exclusive partnership with Snapdeal. The phone was snapped up by college going students.
So, what makes local brands so attractive to Indian consumers? “One, Indian players have an advantage over the global players in terms of having a better understanding of the consumer’s psychographics and demographics,” says Hari Om Rai, chairman and managing director of Lava International Limited. Two, their competitive pricing allows buyers to make a switch from a plain-vanilla phone to a smartphone without feeling a pinch.
Consider the newly-launched Firstouch phone by Gujarat-based company MoFirst Solutions. Priced at Rs 5,999, it has a user interface in Gujarati. MoFirst Solutions which has been started by three IIT-Mumbai graduates, has developed an operating system that allows consumers to translate and transliterate Indian regional languages text to English and vice-versa, just with a single swipe. Micromax’s May launch, the Unite-2 is priced at Rs 6,999 and supports 21 Indian languages and the latest from Karbonn, Titanium S19, comes with 13 mega pixel camera for Rs 8,999. The brand, meanwhile, has made technology its USP. It has introduced several affordable operating systems, such as Android KitKat, Octa-core and Hexa-core ‘true’ processor. “We offer the best in technology and great value-for-money,” says Pardeep Jain, MD, Karbonn.
Maintaining competitive prices is not overly tough for the local players. Rai attributes it to a deep-rooted distribution network and in-house R&D teams that bring down costs dramatically. “A strong, single-layered distribution model, wherein distributors are exclusive as well as directly managed by brands stabilize the price further,” he explains. While most of these brands have similar sourcing models—manufacturing partners in China, Korea or Taiwan—each has its own R&D team to develop and load their own operating system to handsets. “This means we provide a sleek global look and the latest technology at an affordable price,”says Jain.
Even their apps are well received. Fusion, developed by Lava’s Bangalore team, has over 15 lakh times downloads so far from Google Play Store. “Mobile handsets with similar hardware specs as global brands available at a lower price work well for the domestic market,” says Rakesh Deshmukh, CEO of MoFirst Solutions, the company behind Firstouch.
While Lava aims to achieve a 10 per cent share by the end of next fiscal, Firstouch plans to launch phones in several other regional languages by March 2015 and 10 exclusive models in a price bracket of Rs 3,500-Rs 12,500 by next year. Karbonn has a target to sell close to five million smartphones this year.
Moving ahead at a rapid pace, the Indian crop of smartphones isn’t limiting itself to India. While Micromax has already entered Russia with a Rs 100-crore marketing spend, Karbonn’s latest model A50S is among the new breed of inexpensive smartphones compatible with UK SIM cards.