Local phones get upwardly mobile

KOLKATA | NEW DELHI: Listen carefully amidst the buzz of MNC cell phone brands and chances are you will hear a distant but steadily growing ringtone of desi handset brands. Not only are they growing in numbers but also seem to be making rapid inroads into the 130-million strong handsets market.

Take for instance, brands like Maxx, Intex, Micromax, Karbonn, Ajanta, Spice, eTouch, Usha Lexus which are ruling the airwaves or the likes of Gee Pee and Simoco which have been gaining ground.

While the big boys like Nokia, Samsung, LG, Motorola and Sony Ericsson etc., make up for 70% share, rest of the players take up another 20% share.

But it is the remaining 10% of the market where competition is perhaps the most fierce. And that���s the space where local brands are fighting it out. Estimated at Rs 3,000 crore in value terms, it is a lucrative market in itself.
A number of factors seem to be driving this growth. While prices are 40% - 50% lower than the existing big brands, these phones sport trendy features. A high rate of obsolescence and customers who are desperate to grab the latest gizmo is also helped them in clocking the numbers.

Some bigger players however feel that India being a big market, there is room for all kinds of cell-phone manufacturers and that price is not the sole determinant of success.

Sudhin Mathur, MD, Sony Ericsson India told ET: ���India is a very big market, one which is price sensitive, but also with a large set of customers who look for value. Data from independent market research agencies indicates that phones in the Rs 4,000-6,000 and over Rs 15,000 price bands are selling particularly well. So there is room for all kinds of players.���

���It is a tough but rewarding fight. We were the first local brand in the region when we started out in 2006. We have tried to gain consumer confidence by offering a good product with state of art features and a strong service back up,��� Arundhati Sen, head of marketing, Simoco Mobiles told ET. Gee Pee is another strong branded player across Orissa, Jharkhand, Bihar, West Bengal and Assam in the last few years and it comptees with brands like Micromax, Spice, Karboon.

���Gee Pee targets the mass market. Our highest sale is in the price bracket of Rs. 2000 to Rs. 3000. In November, we are launching the cheapest mobile handsets at Rs 994, ��� Bijay Agarwal, MD of Gee Pee Infotech said.

Interestingly, these brands are largely regional in reach though some have positioned themselves as national brand. ���Our brand communication strategy is aimed to project Simoco as a national brand and this has in turn helped us,��� Ms Sen added. Some have growing ambitions like tying up with national level service providers like Vodafone for one, to increase their penetration levels even further.

Apart from price, battery life has always been a strong factor guiding consumer choice in the value for money segment. Simoco say it has just launched a ���dumdar��� battery with strong back up.

Analysts however feel that regional homegrown brands are buying their way to success. Says Rajan Chibba, CEO, Intrim Consultants; ���The plethora of Indian mobile brands spend less on marketing, give higher margins to the distribution channel to push their products. Establish international brands give their wholesalers a margin of about 4% while lesser known brands end up giving them at least 8% margin.���

���They also use cheaper, common parts in their cellphones and invest less in establishing service centres et al. All these savings enable them to provide low cost phones that are hit with the masses,��� he added.

Vikas Jain, business director, Micromax Infomatics, which sells under the Micromax brand said: ���We sell mobile phones in categories where established MNC brands are not present. We do away with redundant features in our phones that inflate their prices. On the trade front, while established brand give about 12% margin to distributors, we give them 15%.���