As a new entrant to the mobile handset market, Sandeep Kedia’s outlook about the mobile industry is naturally bullish. However, what is significant is his optimism about home-grown brands in the mobile handsets space.
“There is immense potential in the market. While the urban areas are witnessing more than 100 per cent penetration, mobile communication is yet to reach out thoroughly to the semi-urban and rural areas,” reasons Sandeep, during a recent interaction with Business Line. “The untapped opportunity is vast and it is an area which is dominated by the national brands. An exponential growth in this segment is bound to happen and I am positive that some Indian brands will create landmarks in the process.”
And my conversation with Sandeep Kedia – Director of Tech-Com, Shree Sagarmatha Distributors Pvt Ltd, New Delhi (http://bit.ly/F4TKediaS) – continues over the email.
Excerpts from the interview.
First, is there a case for national brands?
It is imperative for the development of a nation’s economy that a strong growth of national brands across both the public and private sectors is achieved. With MNCs all over the world now penetrating deeper into regional markets, it is nonetheless tough. However, homebred brands do come with certain distinct advantages which help establish them strongly in the national markets, especially in case of FMCG and consumer electronics sectors.
Owing to a better understanding of the consumer sentiments, the diverse cultural traits, demographics and local conditions, the national brands are able to cater better to the market requirements and suitability. MNCs design and roll out products from a world perspective, and only in the case of extremely important markets, customisation is provided. On the other hand, national brands offer their products solely on the requirements of their national market based on the current and upcoming trends and preferences of customers.
And then, of course, is the price – a very important and determining factor when it comes to reaching out to the masses in a country. For, when offering all the features that the consumer asks for at a price which is affordable for them, the brands are offering a much higher value-for-money proposition.
One other point is the faster response by national brands. Be it about product roll-out, or after-sales, national brands have a much lower turnaround time and respond much faster to the market needs.
Can you give a few examples of strong national brands, from different countries?
Here are a few examples in the world markets today: Micromax in India, K-Touch in China, Symphony in Bangladesh, Nexian in Indonesia, Q-Mobile in Vietnam, and i-Mobile in Thailand.
All these are home-grown brands with a history of just 2-3 years and today they all stand amongst the top 5 players in mobile handsets in their respective countries. Some have even been exceptional performers like Symphony, which toppled market leader Nokia in terms of volumes to become the top player in Bangladesh. Once proved that it is achievable, we are now witnessing a huge number of companies aspiring to accomplish such feats.
What are the prerequisites for any national brand?
To be a national player at a successful level, there are certain strengths that a brand must possess. Foremost is a pan-India infrastructure; that is, a uniformly well-distributed base of offices as well as manpower across the country with the capability to understand and devise strategies according to the requirements of the region.
Specialised manpower perhaps is the best solution today to study the diverse cultures in different parts of a country and relate the same with the requirements and the available technology, and come up with customised solutions at the optimum level. Sometimes, the requirements themselves become a source of innovation as they inspire new ideas and help in the generation of newer technology.
Deep penetration into all markets – urban, semi-urban, as well as rural – helps reach out to people in remote areas and probably uncover newer prospective markets. This is especially crucial for a country like India where cultural diversity is high.
With the tax structure varying among states, it may not be rational to operate only from a central establishment. Offices are, therefore, required in all regional centres. On a related note, since the financial prowess of a company is a vital factor at the end of the day, financial backup is a constant requirement when the scale of operations keeps increasing.
Sometimes we find brands, which, although claiming to be present on a pan-country basis, are found to be concentrating on particular regions only. This poses a hindrance to the company’s development and limits its chances to succeed as a national player. A national brand has to successfully integrate the requirements of consumers from all regions across the country and formulate unified customised solutions which are then effectively applied to all parts of the country.
A very strong and able marketing division is important for a brand to get access to the consumers’ trust as well as elicit feedback from all across the country so as to make possible the study of consumer behaviour and market trends accordingly. The outreach too is made possible through marketing campaigns encompassing all the diverse regions.
Your views on the current consumer choices.
Consumers make the purchase decision based mostly on the utility of the products and their cost in comparison to the utility. Especially in most countries in Africa, South-East Asia, SAARC, MENA and the CIS regions, consumers associate a great deal of importance to the value-for-money quotient.
The approach is also highly influenced by the customisation of features based on local needs and with the quality and durability of the products. These factors essentially determine the performance of brands in such markets.
Yet another factor of equal importance in the long run is after-sales. Many brands offer a lot in terms of pre-sales but fail to keep up to the expectations when it comes to after-sales. It is essential to have a robust after-sales network in place as the relationship with a customer does not end at the point of sale of a product, but continues thereafter. And it is the support that a customer gets after the purchase of a product that determines the image of the brand in their mindset to a major extent. Hence, after-sales service has to be strong and uncompromising in terms of standards.