How Gionee cracked the success code on smartphone

Written by Vikram Chaudhary | New Delhi | Updated: May 12 2014, 17:58pm hrs
GioneeNinety per cent of Gionee's revenues come from smartphones.
A couple of hours before I meet Arvind R Vohra, India head, Gionee Smartphones, I connect with a distributor in the Karol Bagh mobile phone market in Delhione of Indias largest such markets. When asked about Gionee, the distributor smiles and says, One out of every five customers asks about Gionee nowadays. As I share the same with Vohra, he too smiles, and adds, If you launch a product at the right price and ensure its quality is among the best, it will generate interest.

He is right, because until a year ago, not many knew about Gionee. Today, prospective mobile phone buyers have at least heard of the brand and are asking about it. In older days, when a phone didnt work properly and if it was a Nokia, people used to say the network is bad. But if it was a Samsung or a Sony, people said the phone is bad. We aim for that erstwhile Nokia position as far as quality is concerned, Vohra says.

When asked how exactly Gionee ensured supply of good quality products, Vohra replies, In a smartphone, the screen needs to be immaculate, the processor speed needs to be fast, the battery life needs to be good, and memory needs to be great. Because producing a good smartphone needs a lot of R&D,

you cannot make immediate changes to the product depending on market-demand. So, right from the time we entered India, we focused on the fact that the smartphones we manufacture dont miss out on any

required features.

The Gionee India head says, In fact, our good product quality is reflected by our pass rate of 99.7%. The 0.3% products that fail can be managed through good service. He further says that any company can get its products placed in the supply chain and the distribution network, but from there on it has to sell. And it will sell only if it is good. Once your product gets sold and the user is satisfied, then he will get you more customers, Vohra says.

Apart from right price and good quality, what is needed to sell is a proper distribution channel. Vohra adds, Companies such as BlackBerry and Apple came with national distribution networks and then they sold products to regional distributors. We directly went to regional distributors. The money that we saved in the process, we spend on building the distributor organisation and putting our own funded staff in shops. This resulted in a strong sales channel. Then, the service centres also matter. Today, we have 400 service centres, which we are scaling up to 750 by the end of this year. In fact, within one year of our operations, we have 1% market-share by volume and 2% market-share by value. Sharing numbers with us, he says, Last month we sold 1.88 lakh units and generated Rs 143 crore as revenue. By the end of this year we aim to generate Rs 300-350 crore a month in revenues.

Gionee also believes in rankings. Vohra adds, If you dont have a goal, you cannot succeed. We generated revenues ofs R500 crore last year and Rs 143 crore in the thirteenth month. That puts us among the top seven in India. Now, 90% of our revenues come from smartphones, and the smartphone market itself is rising, this means we have ample opportunities for growth. Our products are at a 10% premium of Micromaxs, and 60% the price of Samsungs. In the current scenario, a Samsung buyer doesnt move to an Indian brand because of pride, and an Indian company buyer doesnt move to Samsung because of price.

So who is the Gionee buyer I ask him. Vohra replies, If, on a store, you see side-by-side a R30,000 Samsung, a R20,000 Gionee, and a R18,000 Micromax and all of these phones have more or less similar featuresunless you are very brand conscious, you will go for a Gionee.

This reminds me of a Hollywood actor who was recently chosen by an Indian company to become its brand ambassador. I believe your real brand ambassador is your product. When you want to cut across a larger segment, and if you have a problem moving across segments, only then you choose a brand ambassador, Vohra says. He then asks me, Will that brand ambassador make you move from your Korean smartphone to a phone of the said company Unlikely, I reply.

As I am about to take his leave, I ask him is it feasible to manufacture phones in India. Vohra replies, Today, in India, the ecosystem doesnt support mobile phone manufacturing. Because all the LCD suppliers are either sitting in Japan or in Taiwan, and all casing manufacturers are sitting in China, one will have to collect components from abroad and assemble here in India. And it could turn out to be costlier.

Lastly I ask him about any unique experiences he has had. Vohra says, Recently I got a service call. The man said: My Bluetooth is not syncing with my Mercedes-Benz. What to do That made me feel great. And that means your company has started cutting across segments.