Business – Karbonn leaves its print on the handset market
It is a playground not for the weak-hearted. The market leader is none other than Nokia. Then there are street fighters like Samsung, LG and Sony Ericsson. Motorola may be a little low at the moment but enjoys tremendous brand equity. Into this space has stepped an all-Indian brand called Karbonn.
In the nine months since its launch in April, it has sold 1.5 million mobiles. This might be small in the Indian market for mobile phones which is estimated at 100 million per annum, but it is not insignificant. In the lucrative multimedia segment of the market, the brand hopes to capture 7 to 10 per cent share before it completes one year.
Karbonn Mobiles is a joint venture between Delhi-based Jaina Group and Bangalore-based UTL Group. Jaina Group started out as a distributor of mobile handsets around 15 years ago. Though it now has its own brand in the market place, it is also the distributor of HTC in not just India but the whole of South Asia, and of Motorola and LG in India.
Unfazed by the presence of big handset makers, Karbonn Mobiles believes it has a good chance in the market with a wide range of products at attractive price points. “The kind of distribution set-up we have in place and the wide range of devices, with attractive features at competitive prices, will equip us to make a mark for ourselves in the Indian mobile phone market. This coupled with strong marketing and branding initiatives will turn out to be the key drivers for us to gain a significant pie of the market share,” Jaina Group Executive Director Shashin Devsare says.
Sector experts say that India is perhaps the most competitive market for mobile handsets in the world. Consumers want more and more features at as low price points as possible. Karbonn Mobiles knows this. The company offers customers the same features and quality that they get in global brands at an affordable price range of Rs 1,700 to Rs 6,500. This actually is the sweet spot in which the bulk of handset sales happen.
While the multimedia phones of Karbonn address the urban markets which have begun to saturate, handsets equipped with dual SIM card and battery are clearly targeted at the rural markets. Though rural markets are billed as the next frontier for mobile telephony, the network remains patchy – a pale shadow of what you find in the cities. Consumers therefore prefer phones with more than one SIM card for better connectivity. “There’s a huge market in the rural areas and even the replacement mobile market is on our radar,” Devsare says.
For building brand awareness, Karbonn Mobiles has earmarked an investment of Rs 100 crore for the current financial year. The company sponsored the last India-Sri Lanka cricket series, which gave the brand much-needed visibility. “We have invested heavily in cricket to create brand awareness for Karbonn. It has been one of the key platforms for our branding initiatives since it cuts across all segments in India and establishes an instant connect with the masses,” adds Devsare.
Currently, the campaign for Karbonn Mobiles, which highlights the dual SIM card and battery options, is running extensively on all national and regional TV channels. Besides, the promotion will soon move to radio and outdoor media.
Brand-building and compelling products are necessary building blocks of the business, but they can come to naught if the retail strategy is faulty. Mobile handsets are sold through over a million multi-brand outlets in the country. Apart from the brand pull, the retailer’s hard sell helps the customer’s decision. And a retailer will push that company’s brand which offers it the best profit margins. To make sure that the Karbonn brand does not lag behind others, the company is offering extremely competitive margins to dealers, Devsare says, though he declines to disclose the numbers. But he adds that the company runs various incentive schemes and contests regularly to encourage the dealer community.
That apart, Karbonn Mobiles intends to have five to ten exclusive Karbonn stores in all the major states of the country by the end of this financial year. About 25 models are currently being offered by the company, including touchscreen, dual SIM, and multimedia in both GSM and CDMA spaces. Going forward, the company plans to launch three to four models every month across different segments and price points. The company is currently sourcing handsets from original design manufacturers based out of China, Taiwan and South Korea.
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