These brands have cut the number of models, and shifted focus to driving profitable growth as opposed to chasing market share, which they have lost sharply over the last year-and-a-half to Chinese brands such as Xiaomi, Oppo, Vivo, Huawei, Itel, besides JioPhone, the 4G featurephone. Experts said Micromax, Lava, Karbonn and Intex need to focus on design and quality in the entry-level segment to attract customers.
Intex, as part of its new strategy, is only eyeing the sub-Rs 7,000 handset category, including both smartphones and feature phones. Karbonn is also increasingly focusing on the entry-level smartphone segment, especially the sub-Rs 5,000 category.
Lava has cut back its smartphone models from 10 to five and feature phones from 12 to eight, and is now looking to grow market share in the sub-Rs 12,000 mobile handset segment, said Sunil Raina, president and business head, Lava International.
In 2015, Micromax, Intex and Lava held market shares of 15%, 10% and 6.8%, respectively, while being among the top five players in the market, as per IDC data. Their combined market share slumped to 7% in the April-June quarter 2018, from 22% a year earlier.
Worryingly, in the second quarter of 2018, Micromax saw the highest dip — 41.2% — in net addition of smartphones while Intex and Karbonn saw declines of 11.6% and 5.3%, respectively, as per CMR. Micromax didn’t comment on its revival strategy.
Intex said that the coming in of Chinese Companies, entry of Reliance Jio and demonetisation added to the erosion in its market share. “No Indian player was ready for the sudden shift from 3G to 4G in the market last year,” Nidhi Markanday, Director, Intex Technologies, told ET.
Navkendar Singh, associate director at IDC, said that of the four Indian vendors, only Lava is doing fine. “It is obviously not at the levels it used to be, but it is still sustaining itself in the market by cutting down the portfolio, focusing on USPs, design language and they have a large set-up in Shenzhen as well at the ODM level.”
Lava was the only local brand which registered positive annual growth during the quarter ended June, driven by entry-level models, said analysts.
Faisal Kawoosa, lead analyst and head of new initiatives at CMR, however, said that Indian handset Companies are all essentially trading Companies, and haven’t been strong in Technology capabilities. “Somewhere they also underestimated Chinese brands,” he added.
Karbonn’s executive director Sashin Devsare said the company has lost market share but not at the cost of profitable growth. “We need to be continuously evolve product and marketing strategy to look at the entry level of smartphones. Half a billion feature phone users offer a great business opportunity.”
Analysts from IDC and CMR said that regaining foothold in the market would not be easy for the Indian players.
“If Indian players are able to bring a low-cost smartphone in the market (real price not effective price) at a price point of $45-50 (Rs 3,000-3,500), they still have a chance to fight JioPhone,” said IDC’s Singh.
Analysts believe consumers do not have many options in the $45-50 price point for smartphones, hence local Companies need to try and upgrade some 450 million feature phone users who will have to switch to a smartphone in the next 2-3 years.
Anshika Jain, research analyst at Counterpoint Research, said Indian brands need to focus on design and quality in entry-level smartphone segment, and along with manufacturing, they also need to explore in-house designing of smartphones, along with providing vernacular support and content tying up with operators to drive volumes.
“Indian brands’ performance has been affected by dominance of Chinese players which reached their highest ever share of 62% in Q2 2018 due to their high-end specs at affordable prices, aggressive promotions and focus towards local manufacturing,” said Jain.