Desi Brands on Foreign Trips

With metros and tier-2 cities in India reaching saturation point, homegrown handset players are seeking greener pastures in foreign lands

Soon a er the Indian handset makers an cipated the everyday increasing pressure due to flooding of new handset makers, the smarter ones took a safer route by entering the foreign turf. Many Indian mobile manufacturers have entered the neighboring global markets and are taking advantage of similar telecommunica ons scenarios abroad.

Our own research suggests that revenues in the Indian mobile handset market grew 15% to touch Rs 33,171 crore in 201011 from Rs 28,897 crore a year before. It also revealed that global players such as Nokia had lost market share in low-end segments to home-grown handset makers like Micromax, Karbonn, and Spice. This confidence of upse ng global handset biggies in the home-turf lures the homegrown handset makers to be more adventurous and explore new territories.

Home-grown handset vendors like Micromax, Karbonn, Lava, Spice, Maxx, etc, are taking the much required confidence to expand overseas and put their money in.

Driving Factor

There are many factors driving handset manufacturers and operators to the foreign market. Though India is emerging as one of the biggest telecom markets, metros and er-2 ci es are already reaching satura on point. Hence companies have no op on but to explore newer markets to sustain the growth. But what gives them confidence in entering into newer markets is, firstly, their earlier exposure to these markets in some way or the other.

Not many would know that before entering the handset space, Micromax was into the distribu on business and this experience helped its founders understand various market dynamics.

Karbonn Mobile, a JV between Delhi’s Jaina Group and Bengaluru’s UTL Group rode high on Jaina Group’s 15-year-old distribu on experience. The group led by Pradeep Jain owns a formidable distribu on network in more than 10 countries for leading handset brands like HTC, Samsung, and Motorola.

Similarly, Maxx Mobile had the exposure to neighboring countries as it used to manufacture and supply mobile phone ba eries to various handset makers based out of China and Taiwan. Spice Mobiles of the BK Modi empire had very strong exposure not only to neighboring Saarc countries but also to many countries in South Asia, Middle East, and Africa.

The second most important factor that drives these Indian handset brands to go for a foreign trip is their understanding of these markets. Notably, all the players like Micromax, Maxx, Karbonn, etc, have mostly entered into countries like Sri Lanka, Bangladesh, and Nepal. Players who have entered the foreign market believe customer profiles in these countries are similar to the Indian users, looking for maximum bang to each rupee. There are lot of sociocultural similari es between India and its neighbors. Besides, there has always been a very strong pre-exis ng business rela on among these countries, that gives the home-grown players to try their hand in foreign but not so-foreign soil. However those in Africa look for style and cost.

The Players Micromax

Micromax, undoubtedly the most successful Indian handset companies, a er crea ng a strong foothold in the home turf is looking at interna onal markets more aggressively, to bring in the next level of growth. At present, it operates in 14 countries including Hong Kong, Bangladesh, Nepal, Sri-lanka, Maldives, UAE, Kingdom of Saudi Arabia, Kuwait, Qatar, Oman, Afghanistan, and Brazil. The company is looking at touching 25 markets by 2013. Currently, about 1520% of its income today comes from interna onal markets.

According to VOICE&DATA es mates, Micromax captured the third posi on with the revenue of 2,289 crore in FY11. It grew by 43% from the year ago period when it had registered revenue of 1,602 crore.