Anti-China sentiments present opportune time for LAVA and other Indian Phone Manufacturers

The current market sentiments seem like the perfect opportunity in terms of consumer preferences for LAVA & MICROMAX to gain back their foothold in the smartphone market.

In 2014, Micromax had dethroned Samsung as the country’s top-selling brand. Even in 2015, Indian brands controlled 45% of the country’s smartphone market, with Chinese brands at only 9%, according to data from Counterpoint Research. Their failure to adapt to the advent of 4G, however, caused a stunning reversal in fortunes. Today, Micromax and Lava—the two biggest Indian brands—together account for only 0.4% of the smartphone market.

With the Chinese brands moving up the value chain as they look to drive margins up, Indian brands could move into the wallet-friendly sub-Rs 15,000 ($200) segment. “We plan to launch two models in July,” says Mugdh Rajit, Lava’s head for marketing, sales and distribution strategy. “Our main focus will be on the Rs 7,000-15,000 ($90-200) price band. We already have a good market share in feature phones and we can build on that to get a share from upgrading users.” Analysts, though, caution that upgrades will be slower than usual given that affordability at all levels have taken a hit.

Rajit believes that the company has the required infrastructure and is willing to make investments in marketing as well. At present, it boasts a network of 120,000 retailers across India. “It’s just the product piece that’s missing right now,” he says.

In May this year, the company announced a plan to shift its R&D, design and manufacturing from China to India, in the process investing Rs 800 crore.

With all the claimants to the Chinese brands’ dominance looking at a combination of local manufacturing and budget-friendly phones, the real winners from the anti-China smartphone wave could be customers and the government’s Make in India scheme.

Sandip Ginodia , Director

ALTIUS INVESTECH PVT LTD

We deal in over 60 unlisted companies with 15 years of experience .

For latest prices visit : www.abhisheksecurities.com/unlisted.htm / call : 09830271248 .

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