Can you elaborate on positioning of Lava mobiles in the handset market?
Over the last four years we have been very successful with the entry-level and mid-tier segment of the smartphones market. Our focus on strong products, healthy distribution set-up and a continued focus on service has helped growth. Our focus now is to acquire a larger pie of the premium smartphones market in India and that requires us to position ourselves differently and take off from the platform established over the last four years of our journey. We are soon going to launch Iris Pro – a premium series of smartphones. Hence all our marketing efforts are directed to create a premium imagery of the brand.
What is Lava’s go-to-market strategy for handsets and tablets business?
We closed 2012-13 with revenues slightly higher than Rs.1000 crore, which represents a 75 per cent growth over our last fiscal year’s revenues. In terms of volume we have grown more than 100 per cent over the period. We are selling over a million handsets per month and our focus remains on the Indian market, which we believe continues to have huge potential. We hope to bump up our monthly sales to 1.5 million handsets during the festivals.
To accomplish this, we are undertaking some strategic promotion initiatives. Digital and BTL are key strategic channels for us in our go-to-market strategy for handsets and tablets. We have started by focusing on revamping our corporate website, social media marketing, SEM, SEO to connect with the target group directly and engage with them. We have continuously developed new contests and applications around key product launches to keep the users engaged.
Lava recently entered into tablets business, what has been the response so far in the channel?
Lava has a wide product portfolio that encompasses tablets, feature phones and smart phones having various models in bar and touch form factor at multiple price points to suit all categories of consumers. We launched our first tablet last year the response has been very encouraging from our sales and distribution network. We sold about 38,000 units in the last fiscal year and the number is expected to increase substantially this year.
The primary reason for the increase in demand of tablets has been the value that we are offering to consumers over other high end brands not just in terms of cost but through a lot of pre-bundled content as well. In the next two–three years we foresee a strong adoption of tablets in India particularly in the enterprise and education sector. Factors such as increase in 3G penetration, greater online content consumption and changing lifestyles of consumers in India will further boost demand for Tablets in India and popularity amongst the value conscious buyers.
Handset mobiles sales are growing fast in e-commerce space, what are your plans for digital marketing and how important is both online and offline channel for Lava?
Lava has collaborated with Flipkart, Indiatimes, Homeshop18 and Tradus. As a percentage of total volume sales, it is about two% per month and overall revenue share is about 1.75%. Nowadays consumers do a lot of research online before making a purchase decision especially for smartphones. To engage and be visible to this audience Lava is taking Digital marketing as a strategic area of focus.
Lava was the first to join hands with Intel; can you put some light on this partnership success?
Microchip maker Intel tied-up with Lava International in 2012 to announce the first Intel powered smart phone in India. The partnership was announced at the Mobile World Congress in Barcelona. The first phone that was launched in partnership with Intel was XOLO X900, powered by 1.6 Ghz processor with 4.03-inch high-resolution LCD touch screen.
What is your comment on the major shift in telecom space with Microsoft taking over Nokia’s handset business?
The Microsoft-Nokia deal is a great move, Nokia is a strong player in India and Microsoft being a leader in the enterprise mobility is set to move the market into a new direction. Microsoft will clearly benefit from Nokia’s strong inroads in the Indian market and its existing distribution network across India. The deal will also result in cost benefit for the consumers. We foresee that Microsoft phones will be available at a lower price point than the current Nokia models but only marginally, as the cost of hardware is almost same for all players. With regard to the Indian players who are operating on Android platform, the situation will not be affected much as Android will continue to be the leader in the Indian mobile eco system in the short to medium term.
Are you planning to launch some windows based phones in near future?
The open-source nature of Android gives us flexibility to serve the aspirational requirements of youth in India, something that is not yet feasible on the Windows platform. So, at this moment, we do not have any plans to launch Windows-based phones. However, in future if we feel that similar value can be delivered to the customer through Windows based devices; we are open to doing that.
Can you touch upon channel expansion plans in the pipeline?
At Lava we have sales and service distribution (SSD) network comprising 30+ CFAs, 700+ distributors, 30,000+ retailers and 650+ service centres. Coming to numbers, Lava currently has about 170+ distributors in the East, 120+ in South, 330+ in North, 190+ in West & Central India. There are 170+ distributors in Tier 1 cities including Gurgaon & Noida. As many as 75% of our distributors are in Tier 2 & 3 cities. We plan to increase our overall distribution strength by 25%. We believe that our single-layer distribution model, something that competitors stay away from due to its implementation challenges, is serving us well. Our distributors continue to be exclusively and directly managed and controlled by Lava.