“Out value porposition to cus­tomer had gone down be­cause of Jio”

Gau­rav Nigam, Head- Prod­uct at LAVA speaks on the port­fo­lio and the strate­gic roadmap ahead for the com­pany

PCQuest - - CONTENTS - Jy­oti Bha­gat | jy­otib@cy­ber­me­dia.co.in

What is the size of the cur­rent LAVA port­fo­lio? How are the pric­ing and the prod­uct fea­tures plannned for the dif­fer­ent mod­els?

In fea­ture phones, we are down to only 8 hand­sets and smart phones to 5 hand­sets. In fea­ture phones, the range starts from 850 to 1800 con­sumer price and in smart phones range starts from 4000 and goes up to 10,000. We are fo­cused on our ap­proach and we are com­mit­ting to what we have said; such fo­cus brings lot of qual­ity and ex­pe­ri­ence in­side the prod­ucts.

This un­der­stand­ing gives us in­for­ma­tion about the fea­tures to in­clude in a prod­uct. For ex­am­ple in fea­ture phones, a lot of peo­ple use a fea­ture called torch func­tion; one has to first click but­ton on top then and one has to click the other but­ton then it gets un­locked then one has to click the torch but­ton. We have a fea­ture to di­rectly click the torch without un­lock­ing. En­try level con­sumers too have now started do­ing video call­ing a lot, the What­sapp video call, Google Duo is now be­ing pro­moted. We use Google Duo also and if you do video call, it acts a selfie cam­era. We have also in­tro­duced the flash for selfie.

What is LAVA’s pol­icy on prod­uct refesh?

We keep on re­fresh­ing the port­fo­lio. The gen­eral time­line we look at re­fresh­ing our port­fo­lio for smart phones is be­tween 7-9 months and for fea­ture phones it is gen­er­ally 1 and half years. Ide­ally I plan, so that I can re­fresh one model ev­ery two months. There is con­tin­u­ous ex­cite­ment in the mar­ket that way, but as we all know in project man­age­ment, things gen­er­ally don’t al­ways go as per the plan.

In terms of busi­ness, both fea­ture and smart phones, what will be LAVA’s share of the mar­ket?

Let’s look at what has hap­pened in last one year. Let me give you a small snip­pet of busi­ness. We are around 8 years old now in the in­dus­try. And we are the only com­pany amongst the In­dian play­ers; (if you con­sider all the, brands put to­gether), that has been con­sis­tently in­creas­ing its con­tri­bu­tion for the last

One LAVA model is re­freshed ev­ery two months

8 years. Around 8 years back we started back with the con­tri­bu­tion around 8%. To­day we have around 40-45 per­cent share, amongst the In­dian play­ers, be it fea­ture or smart phones. If we con­sider the im­ports of last two-three months, I think the share is above 60% or so.

What would you at­tribute this success to?

In mar­ket­ing we all stud­ied in MBA the book by Philips Kotler, that we have 4 P’s of mar­ket­ing; prod­uct, price, pro­mo­tion and place. Prod­uct has been taken by Sam­sung and Xiaomi is there to play in terms of pric­ing. I think we have the place part i.e. the dis­tri­bu­tion, our reach and en­gage­ment with the chan­nel, es­pe­cially the reach has in­creased to 160,000 from 120,000 re­tail­ers. No dis­trict is un­cov­ered; the cities of north- east also. We have 1100 dis­trib­u­tors, and In­dia has around 600 dis­tricts. The smart phone cov­er­age out­lets have also in­creased; ear­lier they were 50,000 and now have gone to 85,000. 160,000 is for fea­ture phones & for smart phone it has gone to 50,000-85,000.

How many ser­vice cen­tres does LAVA have? And how many cus­tomers are there?

- One Thou­sand Plus, ser­vice cen­ter are there? There are a lot of cus­tomers. Cus­tomers are be­cause of the war­ranty. So whereever you’ve sold in the last 24 months are your cus­tomers now be­cause you’ve to ser­vice them. There is 2 years war­ranty.

Where is the max­i­mum trac­tion hap­pen­ing in tier 3 or tier 4 towns, or in ru­ral ar­eas?

Fea­ture phones al­ways are pop­u­lar in semi ur­ban ar­eas. In smart phone we see a hike in semi ur­ban ar­eas for our seg­ment and ur­ban also. In ru­ral we just started to do some­thing to mi­grate the fea­ture phone con­sumers to smart phones; some pi­lots are un­der­way.

We can han­dover them maybe for fi­nanc­ing scheme.

How much has Jio helped in this trac­tion?

Jio has re­ally helped but there are both ad­van­tages and dis­ad­van­tages. One can­not take away the fact, that the ad­van­tage is the pric­ing that Jio does.

The dis­ad­van­tage is, one suf­fers when one tries to sell ex­pen­sive fea­ture phone one’s of­fer­ing is not as com­pet­i­tive, and in amount of hardly 150 un­lim­ited call­ing which none does. Our value propo­si­tion to the con­sumers gets low­ered there­fore this is the dis­ad­van­tage we suf­fer be­cause of Jio be­ing there in the

mar­ket.

What about the cat­e­gory that shifted from fea­ture phone to smart phone, where the price range is

4000 to 5000?

Around 1 year back the ra­tio be­tween fea­ture phones vs. smart phones, was 59:41, fea­ture phone was 59% smart phone was 41%. Be­cause of Jio it has in­creased. If you take out Jio from the cal­cu­la­tion, fea­tures phone is only 50-53 per­cent, it is still not de­pleted as much as we or ev­ery­body hopes. The main rea­son be­hind this is the fact that the cus­tomer, who is us­ing a 2G fea­ture phone, doesn’t know the power of in­ter­net. We kept on talk­ing about the shift of fea­ture phone to smart phone, peo­ple will up­grade from fea­ture phone to Smart­phone but we how­ever, don’t see it hap­pen­ing. The process is very slow.

How has been the pric­ing since you talked about the duty since we met 1 year of GST so in terms of the GST im­pact on sells how is that been?

In the ini­tial time the sales had gone down be­cause a lot of re­tail­ers did not have the GST num­bers. There­fore our coun­ters which were sell­ing our prod­ucts had gone down be­cause the dis­trib­u­tors were not billing to any­body who did not have a GST num­ber. But that was the first 2-3 months strug­gle. Now we are again in­creas­ing our reach. Pric­ing is a mar­ket led phe­nom­e­non ac­tu­ally. It de­pends on how your com­peti­tors are play­ing in the mar­ket, your as­pi­ra­tion of shares and the kind of val­ues that you build in the prod­uct. It is the mix­ture of these things on which you de­cide how to price your prod­uct.

GAU­RAV NIGAM, Head- Prod­uct, LAVA Some­times there are one or two launches to­gether. On a plan­ning level we do spac­ing to cre­ate a mileage for each prod­uct in the mar­ket.

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