It’s All About Being Local

Last week my colleague Khristina lost her prized Nokia phone. Given that it is difficult to manage a day without your mobile, she went and picked one in the evening. But this time it wasn’t one of the big brands – she chose a Karbonn phone. The next day in office her phone was the topic of discussion. Many wanted to know why she ditched her long-time favourite Nokia. Bet she is not the only one to do that.

The India mobile market is in a revolutionary phase with local brands like Micromax, Karbonn, Lava, Zen (to name a few) making a mark for themselves in this already crowded market. Today Nokia is not the only one making ‘phones for India’.

You saw their ads catching eyeballs during the IPL cricket season. Two years ago they weren’t anywhere near the biggies, but now they are blitzing in.

So how did this all happen? There has never been an entry barrier in this business. As stated here, these companies source their handsets from China for as little as $16 and bring it to India after paying an import duty of just 1 percent. Micromax and Lava already claim to be a profitable company.

Now this is just a part of their business plan. Their biggest USP is their pricing – most of their basic phones are sold at least 50% cheaper below comparable models of multinational companies.

Now what catches your attention is these brands which sell phones at such cheap prices are actually endorsed by biggies like Dhoni (Maxx mobiles), Amitabh Bachchan (Zen Mobiles), Virender Sehwag, Gautam Gambhir (Karbonn) and Akshay Kumar (Micromax). Also, what surprised me was these brands don’t talk about their pricing in their ad campaigns, but instead talk about its features. Ain’t it a smart move  ? They realized that cricket and Bollywood sell in the Indian market.

Nokia pioneered in making low-end phones for India. But these local mobile vendors have pushed more features like Dual SIM-card slots, universal TV remote and motion sensor gaming at a relatively low price point.

But will this brand exercise be enough?

Also, the biggies already  feel threatened. Giants like Nokia which has seen its market share fall by 12 percent in 2009-10 are betting on quality and sturdy features.

We know that not all the 50 odd brands might survive but the market is surely getting interesting. So which is your next mobile?