Haier pitch

Haier is set to launch its cellphones in India, but rivals need not fear its low end range... yet

Try thinking of a Chinese telecom multinational in India. Names don't come easily to mind, do they? Who "" Huawei? Try Haier Telecom instead.

The Chinese consumer durables marketer is set to enter the handsets market with a sales target of five million units in its first phase of operations.

"India has sufficient healthy, energetic, upmarket consumers who will form our target," says Arun Khanna, vice-chairman and managing director, Haier Telecom (India).

He may sound a trifle over-ambitious, but his confidence probably stems from the fact that India now boasts of five million new subscribers every month, a rate that is forecast to sustain itself for at least another three years.

"India will become the second largest mobile phone market by 2008, and it is a favorable market for Haier, the No 1 mobile brand in China," declares Chai Yongsen, vice-president, Haier, and chairman, Haier (India).

Chinese handsets haven't had much to show for their presence in India so far. Remember Bird, Kejian and TCL? They came and went without creating ripples.

But that doesn't worry Haier, which is betting heavily on the CDMA segment, where operators have been buying handsets in bulk for package deals (hardware plus subscription).

Haier thus debuts with a Tata Teleservices tie-up for its CDMA range, and begins with a 70:30 split in its portfolio of CDMA and GSM models.

"Besides, we will look for shop-in-shop formats to promote our GSM models in the first phase," says Khanna, adding that "company owned showrooms are planned in the second phase".

Haier has another advantage. Unusual for a Chinese company, it actually has some brand recognition in India, thanks to its white goods business (refrigerators, especially). The plans also include setting up a handset manufacturing unit in India, once sales reach a critical volume.

On the price front, Haier is playing safe, with models ranging from Rs 2,000 to about Rs 20,000. "The focus would be on low and mid-range phones in the beginning, while high-end and business phones would also be included in the Indian portfolio," says Khanna.

This aspiring Chinese brand will have to compete head on with the likes of Motorola, Nokia, Sony Ericsson and Samsung, though its aim is not as immodest as to try toppling the leader, Nokia. It would be content with grabbing third spot "" good enough in such a voluminous market.

In the long term, Haier's sharp edge may turn out to be the size of its home market in China, which may give it the scale required to sell at breathtakingly low prices. So far, though, its handsets are not much cheaper than what rivals have to offer.