 "The real driver for data consumption will be video: Shashin Devsare")
Karbonn Mobiles has played a big role in the massification of smartphones in India, Shashin Devsare tells Devina Joshi
Karbonn was in the same bracket as Micromax at one point in time. Micromax has raced ahead as the No 3 handset maker in India and No 2 in smartphones in India. How is it that Karbonn got left behind?
From the first quarter of FY 2013, we have been appearing among the top three smartphones brands, as per independent data from IDC and CMR. We have launched 50-plus models in all, and since April 2012, we have sold about five million smartphones. I don't see why one should have a feeling that Micromax has gone way ahead of where we are. I will say that it is probably perception. We are interested in keeping our business healthy and not get into the rat race of buying market share. On an average 2.5 million phones are sold per month, which gives us a roughly 11 per cent share overall. Micromax may be slightly ahead of us in the last nine months or so, but in the last quarter we were ahead.
We're getting traction in our smartphones business so that perception isn't true. Even when we look at urban markets, when you try to sell a phone upwards of Rs 15,000 there is a segment that will buy such phones in metros and there is a segment that will buy it even in Tier-II and Tier-III towns. The aspiration of people in these towns, because of the democratisation of data rates, is exactly the same as those in metros.
We just launched our HD phones in the range of Rs 20,000 for the high-tier markets. Our strategy is a bottom-up one. There is no reason to complain because of the traction we are getting with these products. Maybe our competitors launched these earlier; probably they would have had a better slice of the pie. What remains to be seen is whether it is going to give their business health a real boost.
Considering the sheer number of masses that Karbonn claims to cater to, we don't see the volume numbers trickling in. Is this a reach or distribution problem?
A year ago, we were at the 1 million-plus level a month (in terms of handset sales), we're now at 2.5 million. That is more than 100 per cent growth in both volume and value. We definitely stand for massification. About 90 per cent of the entire mobile phone market is now in upgrade mode. The challenge lies in capturing the half-billion feature phone users, who are going to upgrade to smartphone, not only with products but also with services.
The mobile market is moving towards the data ecosystem as opposed to voice. How is Karbonn developing its muscle on that front?
It is not just about products but also services. Karbonn is the only Indian brand that has successfully partnered with Tier-I operators, with both Airtel and Vodafone. That is a unique strategy - bundling a solid data plan so the consumer doesn't worry about data cost. Currently we have around 40 app developers in the genre of entertainment, television, video streaming, gaming, utility services. In Q1 2014, we will make investments in differentiating technology and apps.
Do you think Indian handset manufacturers are doing enough to capture such ancillary data services?
I don't think so. To create a services-based ecosystem, you need to do a lot of forward planning. These services need to be affordable and customised. You also need to be able to provide volumes to developers. Our commitments is for million-plus devices, which gives a lot of confidence to developers, including international ones like Truecaller or Gameloft and local players like Hungama. Many developers provide benefits that are not available in standard applications if they were downloaded from any other store. They also customise the applications, depending on the hardware configuration of the product, like the screen resolution, sensors, camera capabilities etc. So a significant effort needs to go in. In the long run, this becomes the differentiator.
You believe Karbonn is poised to become an Indian MNC. What will it take for Karbonn to be bracketed with Apple and Samsung?
In terms of our international footprint, we ship our products to 15 countries including countries in South Asia (Sri Lanka, Nepal, Bangladesh), Africa (including South Africa) and West Asia. We're looking at expansion in other markets like CIS (Commonwealth of Independent States) and South America. We have entered every market with product customisation. We have also established relationships with operators across countries like in South Africa. We do not want to enter a market if we don't have a strong distribution partner or the right equation with operators, or if we are not able to customise our offering to the technical or regulatory norms of a country.
About 10 per cent of our business comes from international markets.
Music and downloads are quite popular in Tier-II and Tier-III cities. Are these markets poised to be the next big potential for smartphones?
We believe data consumption is not going to be driven by social networking. The real driver is going to be video and entertainment. If you see our initiatives in that direction, we've had unique tie-ups with Hungama for embedding applications where each Karbonn user, for a month, was getting unlimited data weaved into that application be it song downloads, wallpapers, screen savers etc. This is one way in which you can stimulate a voice and SMS consumer to turn into a full-fledged data user.
The states with the largest population had become the biggest market for feature phones. The same thing by default will happen for smartphones, too. That smartphone adoption is higher in Tier-I and Tier-II cities was true when 3G was launched in India. As soon as the affordability factor for a smartphone became democratised, that differentiation didn't hold true anymore.
Why have you opted for low-intensity advertising?
That was the case in 2012. In 2013, Karbonn was the only brand to take on two large cricket associations - IPL where we were the sponsors in the television category and Champions League T20, where we were the title sponsors. In fact, our skew towards cricket started in the end of 2009 with the India-Sri Lanka series - a first for a mobile handset brand in India. Unlike FMCGs, where consistency and visibility are far more important, mobile handset brands are driven by impact. Our regular campaigns include 60-65 channels and cricket. In FY 2013, we are looking at a marketing spend of Rs 250 crore.
Karbonn was in the same bracket as Micromax at one point in time. Micromax has raced ahead as the No 3 handset maker in India and No 2 in smartphones in India. How is it that Karbonn got left behind?
From the first quarter of FY 2013, we have been appearing among the top three smartphones brands, as per independent data from IDC and CMR. We have launched 50-plus models in all, and since April 2012, we have sold about five million smartphones. I don't see why one should have a feeling that Micromax has gone way ahead of where we are. I will say that it is probably perception. We are interested in keeping our business healthy and not get into the rat race of buying market share. On an average 2.5 million phones are sold per month, which gives us a roughly 11 per cent share overall. Micromax may be slightly ahead of us in the last nine months or so, but in the last quarter we were ahead.
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Karbonn is associated with the lower rung of the masses. Do you think Karbonn suffers from a perception problem?
We're getting traction in our smartphones business so that perception isn't true. Even when we look at urban markets, when you try to sell a phone upwards of Rs 15,000 there is a segment that will buy such phones in metros and there is a segment that will buy it even in Tier-II and Tier-III towns. The aspiration of people in these towns, because of the democratisation of data rates, is exactly the same as those in metros.
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We just launched our HD phones in the range of Rs 20,000 for the high-tier markets. Our strategy is a bottom-up one. There is no reason to complain because of the traction we are getting with these products. Maybe our competitors launched these earlier; probably they would have had a better slice of the pie. What remains to be seen is whether it is going to give their business health a real boost.
Considering the sheer number of masses that Karbonn claims to cater to, we don't see the volume numbers trickling in. Is this a reach or distribution problem?
A year ago, we were at the 1 million-plus level a month (in terms of handset sales), we're now at 2.5 million. That is more than 100 per cent growth in both volume and value. We definitely stand for massification. About 90 per cent of the entire mobile phone market is now in upgrade mode. The challenge lies in capturing the half-billion feature phone users, who are going to upgrade to smartphone, not only with products but also with services.
The mobile market is moving towards the data ecosystem as opposed to voice. How is Karbonn developing its muscle on that front?
It is not just about products but also services. Karbonn is the only Indian brand that has successfully partnered with Tier-I operators, with both Airtel and Vodafone. That is a unique strategy - bundling a solid data plan so the consumer doesn't worry about data cost. Currently we have around 40 app developers in the genre of entertainment, television, video streaming, gaming, utility services. In Q1 2014, we will make investments in differentiating technology and apps.
Do you think Indian handset manufacturers are doing enough to capture such ancillary data services?
I don't think so. To create a services-based ecosystem, you need to do a lot of forward planning. These services need to be affordable and customised. You also need to be able to provide volumes to developers. Our commitments is for million-plus devices, which gives a lot of confidence to developers, including international ones like Truecaller or Gameloft and local players like Hungama. Many developers provide benefits that are not available in standard applications if they were downloaded from any other store. They also customise the applications, depending on the hardware configuration of the product, like the screen resolution, sensors, camera capabilities etc. So a significant effort needs to go in. In the long run, this becomes the differentiator.
You believe Karbonn is poised to become an Indian MNC. What will it take for Karbonn to be bracketed with Apple and Samsung?
In terms of our international footprint, we ship our products to 15 countries including countries in South Asia (Sri Lanka, Nepal, Bangladesh), Africa (including South Africa) and West Asia. We're looking at expansion in other markets like CIS (Commonwealth of Independent States) and South America. We have entered every market with product customisation. We have also established relationships with operators across countries like in South Africa. We do not want to enter a market if we don't have a strong distribution partner or the right equation with operators, or if we are not able to customise our offering to the technical or regulatory norms of a country.
About 10 per cent of our business comes from international markets.
Music and downloads are quite popular in Tier-II and Tier-III cities. Are these markets poised to be the next big potential for smartphones?
We believe data consumption is not going to be driven by social networking. The real driver is going to be video and entertainment. If you see our initiatives in that direction, we've had unique tie-ups with Hungama for embedding applications where each Karbonn user, for a month, was getting unlimited data weaved into that application be it song downloads, wallpapers, screen savers etc. This is one way in which you can stimulate a voice and SMS consumer to turn into a full-fledged data user.
The states with the largest population had become the biggest market for feature phones. The same thing by default will happen for smartphones, too. That smartphone adoption is higher in Tier-I and Tier-II cities was true when 3G was launched in India. As soon as the affordability factor for a smartphone became democratised, that differentiation didn't hold true anymore.
Why have you opted for low-intensity advertising?
That was the case in 2012. In 2013, Karbonn was the only brand to take on two large cricket associations - IPL where we were the sponsors in the television category and Champions League T20, where we were the title sponsors. In fact, our skew towards cricket started in the end of 2009 with the India-Sri Lanka series - a first for a mobile handset brand in India. Unlike FMCGs, where consistency and visibility are far more important, mobile handset brands are driven by impact. Our regular campaigns include 60-65 channels and cricket. In FY 2013, we are looking at a marketing spend of Rs 250 crore.