Competitive landscape of Indian mobile retail market According to international data corporation, India was the fastest growing smartphone market in Asia/ Pacific with a quarter- on – quarter growth of 27% in Q3 2014. The India smartphone market outshone other emerging markets in the Asia/ Pacific region. (IDC Announces India As The Fastest Growing Smartphone Market In Asia/Pacific In Q3 2014, 2014).
The major players in the Indian retail market are Samsung, micromax, lava, karbonn, Motorola, apple and others.
Samsung is the market leader in Indian mobile market followed by Micromax and Lava. A competitive landscape mapping should be done to better understand the different dimensions of the Indian mobile market.
Retail Landscape Samsung
Retail Strategy: Samsung releases a wide range of Android-based models every year that cater to low-end as well as high-end customers in India. Most of the Samsung smart phone models run on Android operating system which is considered more user-friendly than the Apple based iOS operating system. Samsung’s strategy is to boost sales in low-penetration but fast-growing market. For this it set up 1,000 such stores this year in tier IV and V markets in 2014. The stores size will be 300-400 sq ft stores and have limited inventory and demo units, which will lower operating costs, and will be serviced by distributors on a daily basis. Availability: Samsung runs over 2,000 exclusive brand stores in India under the franchisee model, of which 1,100 are of the Smartphone Cafe format, where only smart phones and tablets are sold. Smartphone Cafes account for 15-20% of Samsung's mobile phone sales in the country, according to industry estimates. The company, however, has decided to do away with the different retail branding and will henceforth run all its stores under the Samsung brand. Mr. Vineet Taneja, Samsung India's country head for mobile phones and digital imaging said that the company is addressing competition from Nokia and China-based as well as Indian telecom handset sellers by being
more innovative, by being smarter on the street in terms of in its retail and its distribution part, building more aspirational brands. Online Presence: Samsung started selling its mobile devices online in 2011. The corporate communications department at Samsung feels that the convenience provided by the online format and the charm of an additional channel gives a lot of influence over customer’s decision and act as a referral medium. The social media strategy of Samsung mobile focuses on galaxy note ll and galaxy S || through facebook, twitter and youtube.
References: http://articles.economictimes.indiatimes.com/2014-0408/news/48939472_1_micromax-vineet-taneja-stores http://blogs.wsj.com/indiarealtime/2013/06/21/samsung-smartphones-take-lead-inindia/ http://www.telegraphindia.com/1130408/jsp/business/story_16759686.jsp#.VNZsKd KUcQc http://www.socialsamosa.com/2013/01/social-media-strategy-review-samsungmobile-india/
Micromax
Retail strategy: Delivering the right value at the right price seems to be the core of the company’s strategy. It does this by ensuring it has enough offerings in a hyper-competitive market and basing its products on off-the-shelf technology (which is always cheaper than a proprietary one). Under this new partnership, Aircel and Micromax will share their Channel and Retail Networks, Sales Resources and run an integrated device sales activation program to redefine the user experience and take data penetration to the next level. It is estimated that by the year 2020, mobile internet users are set to grow 4 - 5 times and smart phone penetration is set to increase 5 times to 50 per cent in India. Since, the importance of smart phones to drive/use data is growing phenomenally, this partnership can bring great endeavours for deeper penetration as well as affordability as consumers can enjoy seamless connectivity through affordable call rates, data usage and internet TV on Micromax devices.
Availability: Micromax has enough reach in india with 130,000 retail outlets in 560 districts across India
Online presence:
Micromax, the Indian smartphone OEM has announced a new brand called YU, which will be online only and ‘direct to the consumer‘. This is clearly a strategy Micromax has adopted to counter the ever growing threat from Xiaomi, whose recent successes in Indian market has made company executives sit back and rethink strategies. Micromax isn’t the first one to go this route. Few weeks back, Huawei announced that their HONOR series of smartphones will be solely sold online. Lenovo too has gone ‘online exclusive’ for its VIBE series of smartphone. Clearly, Xiaomi and OnePlus have forced many companies to think different and take an online-only route. But unlike Xiaomi, Micromax and others have considerable (and strong) offline presence, so it makes sense to separate their online business with a completely new brand.
References: http://www.livemint.com/Industry/HAdRsdSfeXc5D3vuX6ojvO/How-Micromax-madeit-big-in-India.html?utm_source=copy http://www.dnaindia.com/money/report-aircel-micromax-enter-into-strategicpartnership-1893839 http://techpp.com/2014/11/18/micromax-yu-cyanogen/
Lava
Retail Strategy: Lava is looking at a larger perspective in order to expand. E-commerce is not looked at for discounting and reducing the price, rather reaches out to people who want to interact with the brand digitally. Lava has a single layer distribution model wherein partners are directly controlled and managed by Lava, unlike other players in the industry. This is a tougher model to implement but helps control the price and also in maintaining a direct relationship with the partner. The company has 900 distributors throughout the country .In the Large Format Retail ( LFR) segment, Lava offers a very strong proposition to the retailers in terms of price stability, direct billing and after sales service. Next, all modern trade billing is 100% direct from the company which offers higher ROI for the retailers. Last, any defective handset is replaced immediately by the retailer post a QC at its service centre. Working deeply with the store managers/cluster managers to ensure that we have the required market intelligence to place right product at the right
Availability:
BTL (below the line has been integrally linked with its strategy to expand its retail footprint in the country. BTL activities enhance Lava's visibility at the retail level where the final purchase decision is made. These include aggressive deployments of Shop in Shop counters, signage, POS(point of sale) material, so on and so forth. Having done branding at about 21,000 outlets in the previous financial year, the strategy of focusing on aggressive BTL activities at retail outlets will continue this year which is expected to be done in more than 30,000 outlets.
Online Presence: Lava’s Smart phones and Tablets are the two categories that have been doing extremely well through e-commerce. Lava launched its Iris X1 and X5 exclusively with Amazon.in accompanied by heavy branding on the ecommerce platform to generate awareness in the first few days post launch. Lava’s Iris X1 for instance was sold out on the first day of the launch. They had also launched its first e-store with eBay for the convenient purchasing. The company has revamped its corporate website, social media marketing, SEM, SEO to connect with the customers directly. Also engaging through display campaigns on popular general interest websites such as Navbharat times, TOI and Yahoo; Tech websites such as gsmarena.com & tech2.com to name a few. Lava to launch new sub-brand of Xolo to recreate Xiaomi’s online-only model. This will be done through an exclusive e-commerce portal for conducting the online sales smoothly.
References: http://www.campaignindia.in/Article/373168,lava-looks-to-dial-into-premiumsmartphones.aspx http://www.exchange4media.com/57828_mobile-companies-ride-on-e-commerceboom-to-boost-sales.html http://telecomtalk.info/lava-to-launch-sub-brand/129870/ http://www.lavamobiles.com/Material/LavaNews/Mobility%20India%20Smartphones,Today,Offer%20A%20Big%20Financial%20Opportunity%20For %20Companies%20and%20Partners.pdf
Karbonn
Retail Strategy: The company’s aim is to provide a unique user experience to the consumers and through its association with Telecom partners. Karbonn has been
associated with Vodafone and Airtel for their Internet packages. Brand Karbonn enjoys the benefits directly from the incredible distribution strength of its two parent companies. As part of its strategy to massify technology, it has established a strong presence through retailers of various sizes to reach out to the deepest pockets of the country. In addition to inventory management in this channel, Karbonn also focuses on various programs and promotional offers to energize the channel, including the use of new media like LED screens for branding, etc. Retailer training is an important part of ensuring completeness in the consumer purchase experience.
Availability: Karbonn has over 85,000 retailers and 870 service centres (around 150 dedicated exclusively for Karbonn) across India. Karbonn has also tied up with online digital entertainment service provider Hungama.Com and have an app preinstalled.
Online presence: Flipkart.com has struck a deal with Karbonn Mobiles. It is specially targeted at Tier II and Tier III cities for four Android-based models - Karbonn Smart A52+, Smart A12, Smart A11 and Smart A50S - priced in the range of Rs 2,699 to Rs 4,499. The online platform has also rolled out two television campaigns highlighting a different Karbonn smart phone and its value for money nature. Karbonn has been testing an online-only retail model for some time now - it had tied-up with Amazon.in, in May 2014, to sell its Titanium Hexa smartphone priced at Rs 16,990. According to sources, the handset maker is all set to announce an exclusive partnership with SnapDeal soon.
References: http://www.afaqs.com/news/story/41716_Flipkart-Karbonn-Smart-Calls http://www.lavamobiles.com/Material/LavaNews/Mobility%20India%20Smartphones,Today,Offer%20A%20Big%20Financial%20Opportunity%20For %20Companies%20and%20Partners.pdf http://en.wikipedia.org/wiki/Karbonn_Mobiles
Apple
Retail strategy: The strategy was to wait for the proper time to dive deeper in the smart phone scene in India and it did when it managed to cross 1
million units of cumulative iPhone shipments for the first time ever in a fiscal year. A recent post by Counterpoint Research notes that this accounted for nearly half of high profit, premium segment and stole some of Samsung’s share. Hitting the 1 million mark appears to have been the only green flag which paved the way for Apple’s big push into India. However, one downside is that though the company which made its debut in India in 2011 has so far failed to make the kind of impact Samsung boasts about. Even the latter is facing tough times now owing to fierce competition from home grown players and Chinese brands. Thus as quick response to the evolving mobile device scene Apple will be going local in the actual sense. The task of opening the 500 dedicated stores in India may be managed by Redington, its biggest distributor in India. Apple’s strategy will be crucial to tackle with the upbeat competition as it has for the longest time lost out in the market due to its pricing policy and the fact that it always focuses on the high end market. Apple so far has followed the Cupertino-centric strategy that is very different from its Indian rivals. They launch only a single smart phone model every year. The older versions of iPhone are sold at cheaper rates but yet this is not affordable for most Indian smart phone users. Also, Apple does not provide support for many of the mobile phone carriers in India. Availability: Apple is reportedly finalising plans to strengthen its presence in India by setting up 500 stores in the country and focusing on smaller towns and cities. Apple’s push for a greater reach in India will help it tap the burgeoning demand for premium smartphones. These new stores will be smaller in size and could range from 300-600 sq ft against over 2,000 sq ft size of existing stores in bigger cities. Online Presence: While there are many online stores selling Apple products in India, a new storeMacSlatch.com, which is claimed to be India's first online exclusive store for Apple products, has been launched. According to the company, Macslatch is the first online store to provide services to both existing and new Apple buyers.
References: http://www.mobiletor.com/123213/apples-move-set-500-dedicated-stores-india-notbadly-timed-think/ http://blog.cromaretail.com/index.php/smartphone-wars-in-the-indian-market/
http://ibnlive.in.com/news/an-online-store-in-india-that-exclusively-sellsapple-products/477994-11.html
Perceptual mapping on the basis of leadership and choice
Micromax Karbonn Lava
Source:
Perceptual mapping on the basis of ease of use and excitement generated
Micromax Lava Karbonn
Source: www.perceptualmaps.com
Perceptual mapping on the basis of value offered and specialization provided Good value for money
Micromax Lava Karbonn
Poor value for money Source: www.perceptualmaps.com
Works Cited IDC Announces India As The Fastest Growing Smartphone Market In Asia/Pacific In Q3 2014. (2014, November 26). Retrieved from www.idc.com.
http://www.perceptualmaps.com/example-maps/
Directions for future of Indian mobile retail sector Future scope of Mobile industry: India's handset market, one of the largest in the world, continues to grow strongly every year. Wider availability of more affordable handsets, including smartphones, and significantly lower call rates has catalysed growth in the market, most notably in rural areas. Competition within the crowded market is intense with more than 50 device manufacturers now selling their products. Most of these companies focus on low cost feature phones. While feature phones have dominated the market for some time, their position is being eroded by the emergence of better value smartphones, a trend which is seeing a greater number of manufacturers focus on producing more sophisticated devices. Ansoff Matrix
The companies like Samsung, Micromax, Lava are focusing more on the Product Development and in future may work on Product diversification with the huge emerging developments in the mobile applications and digital world. The upcoming technological advances are creating new prospects for these companies to develop their offerings. BCG Matrix
Talking about the BCG matrix, the companies like Samsung, Micromax, etc. have huge opportunities of business growth in the mobile sector. They can be called as STAR where the companies can invest on generating profitability and improved sales. Identification of right customer needs, changing market trends and utilization of technological advances will help them achieve sustainable competitive advantage over others and achieve leadership position in the local as well as global market.
Market Change Trends 1) A rich User experience- Simple yet rich product experience is a key differentiator for any competitive brand. The products should be such that the consumers can fall in love with it. Today, Sharing of experiences is more important for customer engagement. This helps in generating strong customer satisfaction and ultimately build brand loyalty. 2) Business Models- Mega and regional operators consolidating fixed mobile convergence, internet-based business models. 3) Technology- various advancements in the Technology like Internet convergence, non-cellular wireless, RFID, etc. are acting as an enabler for faster growth and developments in the mobile sector. 4) Geographical and consumer diversity- Geographical differences in consumer behavior as well as business landscape are biggest challenges for any retail market. The internet diversity is another such market trend. 5) Growth Opportunities- Growth of device market, infrastructure growth, growth potential in convergence services, enterprise mobility and infrastructure solutions and services are major opportunities for the mobile sector. Marketing Mantras
1) 2) 3) 4)
Being global through local is the key to adapt to the changing market trends. Building both, strong product as well as service offerings for the customers. Provide better and superior customer service Focus on Accessibility and Affordability for Managing the product portfolio and end to end target of every consumer spectrum.
Road Ahead:
Online as a sales channel Indian handset makers are expected to increase selling their new smartphones through online channels, hoping to mimic the robust sales that Xiaomi and Motorola have reported in India by tapping the cost advantage and direct consumer connect that the medium offers. Selling online not only helps handset companies keep greater control on channel, distribution and supply chain, while keeping marketing and pricing policies separate, it also helps to cover the main brand in terms of any exposure to unseen risks. You can easily kill the category without impacting the brand. Online sales in the total volume of smartphones sales in India is set to grow to 22%-25% about 15% in 2014, as the online route offer better margins, tighter control on distribution channels as well as product differentiation.
Low cost android phones "Growth in the India market doesn't rely on high-end devices like the iPhone, but on low-cost Android phones. Nearly half of the smartphones shipped in India in 2013 cost less than Rs 7200," said Kiranjeet Kaur, senior market analyst for mobile phones at IDC Asia/Pacific.
IDC research showed nearly half the mobile handsets sold across the world have retail prices of less than Rs 6000 without sales tax. Two thirds of those have prices of less than Rs 3000. As a result, smart phone vendors will position for this next wave of cost pressure. Samsung, for example, is increasingly moving production to Vietnam in the face of rising labor costs in China.
Content as a differentiating factor Handset makers are identifying content as content as a key differentiator; market leader Samsung expects around two million users for its content services in India over the next year. Partnership between global phone manufacturers and technology providers can be a phenonmenon in the future. One such is Appple-IBM partnership in which IBM is to develop pack of focused mobile business apps catering to sectors ranging from financial to law enforcement specifically for Apple devices. Top carriers Bharti Airtel and Vodafone India are developing apps and pushing carrier billing to connect directly with a surging smartphone user base in a bid to stay relevant, As part of its 'Smartphone Network' campaign, Bharti Airtel, India's No. 1 operator, has hired close to 30 IT professionals for an innovation team under its new IT head, Harmeen Mehta, with a focus on creating original content for use on smartphones. No. 2 Vodafone India has asked various healthcare and education sector entities to join hands with the company to develop applications to create successful ehealth and eeducation products.
Mobile for payment option Mobile is going to play a much more important role in the coming years. Penetration of smartphones & tablet devices is paving a new road for shopping and payment methods. People have now started using their credit cards, digital wallets, etc. for purchasing online. These payment methods are definitely going to collect huge sum of payments. The brick and mortar retailers need to identify how they can synchronize purchases with the mobile devices consumers use while they are in the store (sending a notification about the product they purchased, discount offers, and etc. over a secured network). These methods will open up new possibilities for the retailers at the point of sale. They will need to identify such opportunities and integrate new trends into their existing landscape, which will help them reap the profits.
India as a next mobile manufacturing hub
By comparison, India, though the world's second-largest mobile services market, has failed to spawn a manufacturing hub for handsets. According to the Indian Cellular Association (ICA), a body representing the mobile phone firms, 67 per cent of the 245 million devices sold in India in 2013 (63 per cent, or Rs 36,000 crore, in value terms) were imported . With Intex being only company manufacturing mobiles in India, Prime Minister ambitious Make In India call can Encourage more Indian manufacturers like Lava and Micromax to manufacture phone components in India rather than importing individual components from China and assembling in India. The manufacturing can give impetus to the infrastructure development and contribute to GDP in a big way creating number of employment opportunities. Assuming the entire handset demand in the country was to be met through domestic production; more than 61,000 manufacturing and related jobs could have been created in India.
More foreign players entering India More and More global foreign mobile manufacturers to start selling in India. Players like Huawei, ZTE and OPPO already making efforts to capture Indian Market along with already known Chinese phones manufactures like Xiaomi and One Plus.
Indian mobile manufactures to forge exclusive partnerships with technology providers Indian mobile manufactures can collaborate with foreign technology provide to provide their technologies to indian consumers beside Android and Apple ios. The Micromax-Cyanogen partnership will be a one of its kind hardwaresoftware partnership pertaining an Indian handset maker. The first device coming out of this union will be the first to be launched with Cyanogen’s new Themes app which allows deep levels of user interface customisation.
References: http://www.cnbc.com/id/101442145#. http://www.computerworld.com/article/2859480/apple-ibm-partnership-off-toimpressive-start.html http://www.ipsosconsulting.com/pdf/Research-Note-India-Mobile-Phone-Market http://tech.firstpost.com/news-analysis/micromax-will-be-an-exclusive-cyanogenpartner-in-india-243739.html
