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Journalism of Courage
Would you buy a BenQ, Bird or a DBTel cellphone? The first one is a Taiwanese make, while the other two are Chinese.
Kamlesh Saluke, a 26-year-old pharma executive in Mumbai, has just bought a BenQ. 8216;8216;The models were colourful, light, loaded with features and within my reach,8217;8217; he says.
Ashish Bakshi, country manager of BenQ, Taiwan8217;s largest mobile manufacturer, is looking for more people like Saluke across the country.
The handset market is already crowded by biggies like Nokia, Motorola and Samsung, but Bakshi is confident of making it here. 8220;We believe that there is enough room for many more players, especially at the lower end of the market. Our USP is affordability with quality,8221; he says.
Lower prices, more features and a seemingly, well thought out strategy. The Dragon is back and is confident that this time, there won8217;t be a debacle of the Chinese bikes kind.
Destination India
Faced with overcapacity and a likely inventory pile-up, manufacturers such as BenQ and Bird are looking at crossing borders. 8216;8216;For Chinese companies faced with overcapacity and a shrinking market, India makes the nearest and the most fertile destination,8217;8217; explains Kobita Desai, principal telecom analyst at Gartner.
Adarsh Shastri, head of marketing at Agrani Convergence, the marketing company for Bird Telecom in India agrees. Bird is the number one handset company in China with more than 16 per cent market share. 8216;8216;India has shown exponential growth in the telecom sector. So, it was only logical to come here,8217;8217; says Shastri. DBTel, the other player and China8217;s third-largest cellphone manufacturer, also believes that such a step will pay off and, according to sales director Lewis Tu, is looking at around 30 per cent of their global revenue from India by 2004 .
Making room
Consider these numbers: Close to two million people are signing up for mobile phones in the country each month. Fuelled by the world8217;s lowest call rates, this number is expected to touch at least 100 million by 2005. Moreover, there8217;s the replacement market8212;the average replacement time in India is 18 months8212;the Oriental players are looking at.
The established companies, on their part, do not deny that new players help increase market size. 8216;8216;The market is definitely expanding because of the new players,8217;8217; says an official spokesperson for Samsung, adding quickly that they will always be a premium category player.
But just how are the likes of Bird and DBTel going to crack India? Bird says it8217;s going to be one step at a time. When Bird started manufacturing and marketing its mobile phones in China in 1996, the situation there was similar to India. The European giants had already occupied every inch of telecom space, says Shastri. 8216;8216;Through a meticulously planned distribution strategy and a bulging marketing budget almost Rs five crore per month!, Bird got to the number one spot in about seven years. We can easily do the same here,8217;8217; he adds.
The key advantages with these players is their price points. Targeting the sub-four thousand category has given the new players access to the expanding lower income segment of the market.
With price points ranging from Rs 3,500 to Rs 15,000, the customer gets a wide range to choose from. Besides, points out Desai, they are Asian players and know the Asian market very well. BenQ has manufactured mobile phones for companies like Motorola in the past and has also been marketing different digital lifestyle products in India for the last two years. Bird too has an Indian connection and is marketing its product through Agrani Convergence which already has retail stores throughout India.
Tough call
8216;8216;It will not be a cakewalk. Low pricing is definitely not a marketing tool,8217;8217; warns Narendra Nayak head, handsets division, Motorola. Plus, he adds, for companies that sell at low prices, there8217;s always going to be competition from the grey market. But Shastri says that Bird will aim mainly at non-metros. Ditto for DBTel. Their distribution and after-sales network might well be in place, but, according to industry sources, the biggies are contemplating lower price points for their own cellphones.
8216;8216;We too have some sets in the sub-Rs 5,000 category and might move down further.8217;8217; says Nayak. Desai, also, feels that the market could see a widening of portfolios by the bigger players to cover all price points. Which means that in the months to come, the eventual winner will be the consumer.
