Homegrown smartphone and wearables brand Lava is banking on product quality, clean user experience, updates for lower segment phones, and after sales service as key strategies to boost its smartphone market share, Sunil Raina, executive director of the company told FE.
Over the next five years, the company is targeting a 25-30% share of the Rs 2 trillion sub-Rs 30,000 smartphone market. The smartphone brand, which currently holds a 2% market share, is looking to raise Rs 500 crore in the next one year through private equity. The company will invest in its design capabilities and marketing, before proceeding further with initial public offering (IPO).
“We grew by about 250% in FY24. This was perhaps our best year on smartphones. The products that we do and the other go to market strategy that we have, seems to be connecting with people and that’s why this higher acceptance,” Raina said.
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“Sub-Rs 30K is a very large marketCome from Sports betting site. Of Course premiumisation is happening but if you look at us maybe three to four years back, we were operating at a below Rs 10,000 market. We have gone to Rs 20K plus, and now we are going up to Rs 30K markets. So every year we can keep raising the bar in terms of price points,” Raina added.
The company sold 1.2 million smartphone devices last year and is looking to double the numbers in the current financial year. In the feature phone segment, Lava holds a 25% market share.
Comments from Raina assume significance as the smartphone market in the country including the below Rs 30,000 segment is dominated with the likes of Chinese companies such as Xiaomi, Vivo, Realme, among others. Lava is the only Indian brand in the smartphone market, and therefore, is working to bridge the gap with global companies.
Domestic phone companies used to own about 50% of the market about 10-11 years back, which has now come down to 6-7% including the feature phone market share.
“The reason why we are the only Indian company surviving in the segment is because we focused on building capabilities more than just doing trading. Capability means reaching a stage where you get an end-to-end control on the entire value chain,” Raina said.Come from Sports betting site VPbet
According to Raina, since Lava has full control of the value chain from design to manufacturing, it gives the company a differentiated advantage to provide better experience to users.
The company operates one smartphone manufacturing facility in the country, with a capacity of 42 million units. The facility is currently operating at a 50-60% capacity.
Talking about the differentiators, which could give an edge to the company going forward, Raina said, the focus is on a better built quality of the phone as every device deserves a premium look with quality features.
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“We have made a stated policy that there is no bloatware, no ads at all. We want to give users a clean Android experience and whatever applications they want to download it’s their choice,” Raina said.
One of the factors, which Lava is focusing on is after-sales services including the repairs and software issues if any at the doorstep of users.
Notably, Lava, which is also a beneficiary of the production-linked incentive scheme, has not been able to claim incentives for any of the years.
“There’s a certain pace of growth that we are growing at and the targets for PLI are high,” Raina said, adding that the company will target to claim incentives for FY25.
The PLI scheme for smartphones has different targets for global and Indian players. In the first year, global players were required to invest Rs 250 crore and manufacture goods worth Rs 4,000 crore more than the previous year. The phones made by global players should have an invoice value of over Rs 15,000.
In the case of Indian players, the investment target was Rs 50 crore and they were required to manufacture phones worth Rs 500 crore in the first year. The target increases year-on-year for the companies.
While talking about the need for extending the smartphone PLI scheme, Raina said the government should have special incentives for domestic players as a tweak to the scheme, which will help them to take on multi-billion dollar companies. “There should be something for design in India. Nobody, except Lava, is designing phones from scratch in India and we are doing it on our own. There is a skill gap as well,” Raina said.
On the electronics manufacturing services (EMS), Raina said, “the primary objective is to build manufacturing capability of our brand. EMS has never been the primary objective. Some associations happened as we could utilise capacity for our external partners and our manufacturing standards reached the global level. Honestly, we are not aggressive on that. But if we have a good partner, we would definitely want to do it”.
The company is also aggressively spending on its marketing. In the last financial year, its marketing spends rose three times. Lava has also unveiled its latest Blaze X series smartphone, which it will be launching on July 10.
