B K Modi Group's Spice Ltd is gearing up for a pan-India presence in the mobile handsets market. Gentle and suave Kunal Ahooja has an uphill task. As CEO of Spice Ltd, a group company of $250 million M Corp Global, he plans to build the brand "" Spice handsets "" from a virtual non-entity to an aspirational brand.
In addition, the CEO of the Rs 140 crore company aspires to command 10 per cent of the market share of the mobile handset industry in the next five years. And though it may seem a tall order considering the immense visibility and aggressive marketing of global brands Nokia, Samsung, Motorola, LG and others, Ahooja clearly remains unfazed.
"Being an Indian company, we understand the market and requirements of Indian consumers much better than the global brands," he says confidently. And that's exactly the pitch that the company's advertising agency JWT has helped it adopt: "Style international, Dil phir bhi Indian."
In trying to leverage Indian values in its advertising, the company plans to touch an emotive chord with the Indian consumer. Designed and customised by Noida-based Media Tek (headquartered in Taiwan) that supplies chip sets for DVD players and mobile phones across the world, "Spice handsets," claims Ahooja, "have an Indian heart and soul even as it is assembled by original equipment manufacturers (OEMs) in Taiwan."
Spice Ltd forayed into the Rs 10,000 crore cellular handset market in June 2005 by launching two entry level Spice handsets in northern India across Rajasthan, Uttar Pradesh, Punjab, Haryana, Himachal Pradesh and Jammu & Kashmir. The encouraging sales of the Indian brand of mobile phones has now prompted the company to look at a pan-India presence.
"A test launch in Punjab last year made us realise that consumers are willing to accept a local brand in the maze of global mobile phone brands. It gave us the confidence of launching the Spice range of handsets across the country," says Ahooja who also has the experience of Nokia and Samsung sales behind him.
The company is now expanding in the east and south India and is launching its handsets in Orissa next week. It will enter the market in Tamil Nadu and Karnataka by December. By January, the company claims its handsets will be all over India.
But how does the company intend to find even an iota of space in the highly competitive handset market? Spice Ltd has its strategy clearly laid out.
It is following a reverse distribution plan by launching handsets in smaller towns and will then move to bigger towns and cities. Since the products are low-end entry level phones, it makes business sense to focus on the smaller markets.
While Spice currently has only two ranges"" the basic black and white S500 for Rs 2,500 and the S600 with an MP3 and 128 megabyte memory costing Rs 5,799, by December it will introduce three more models.
Although focussed on the entry-level segment the company dislikes being addressed as the "cheapest"handset company. It's planning a smart phone and a 1.3 megapixel camera phone for Rs 9,500 by January 2006.
"We're not claiming to be the cheapest as we don't want to compromise on the quality and reliability of the product. Indians by nature are very quality conscious people," feels Ahooja.
In a bid to create an aspirational value for the brand, Spice has taken care to add differential features. Keeping in mind the Indian conditions, which make keypads look dirty and grubby, Spice handsets have either black or dark coloured keypads.
Moreover, the sound levels of ringtones have been enhanced to make them more audible amidst Indian noise conditions. Besides, each of the phones (whether entry level or higher) come with additional features. Model S500, for instance, has a speaker phone, white LED and preloaded popular film songs as ringtones. Meanwhile, the marketing strategies of the company will focus on below-the-line activities in vernacular mediums like dealer meets and road shows.
By 2006, the company will also start its own manufacturing facility at Baddi in Himachal Pradesh. "By end of 2006," says Ahooja "we will definitely sell nearly 5 lakh handsets"
Let's see whether Ahooja's promises manages to add more spice to our mobile nation.
