Realme recorded the highest growth in India in October according to IDC data.
The year 2020 was an overwhelming year for the smartphone and IoT industry. But while there were multiple challenges, “we were also presented with a number of opportunities that contributed to our growth,” Madhav Sheth, Vice President, Realme and Chief Executive Officer, Realme India and Europe tells Financial Express Online in an exclusive interview. “We believe that the upcoming year will see a growth in smartphone shipments because consumers now understand their significance and they are also looking forward to adopting new technologies like 5G,” he adds.
Due to the nationwide coronavirus lockdown earlier in the year, manufacturing and sales were nil for at least a month and that pushed multiple brands to revisit their targets for the year. Numbers seem to suggest, the industry was quick to respond and adapt accordingly, once the lockdown restrictions started easing and sales resumed. According to data released by research firm IDC, the Indian smartphone market registered a record growth in shipments in October driven by festive sales and pent-up demand. Realme recorded the highest growth–48.2%–in that period.
This was also the year when Realme expanded into other categories, with better, more diversified products, ranging from truly wireless earbuds to smart TVs. “With the growing need for a connected lifestyle and rising demand from consumers, we believe that the AIoT segment holds great potential to grow in 2021,” Madhav says, adding that Realme will launch even better, more premium devices in India in the new year.
No one saw the pandemic coming, how did the smartphone /IoT industry adapt to it –how did your brand adapt to it specifically?
Well, I believe in being optimistic. Every disruption offers you an opportunity to go back to the drawing board and create a stronger blueprint for success. While the initial months of the pandemic were quite challenging, we used this opportunity to double down on research and innovation, dig deep into the consumer psyche and understand their expectations and plan truly diversified business portfolios across smartphones and AIoT.
We understood the varied needs of the young, millennial demographic and introduced our “1 core smartphone + 4 smart hubs + N smart gadgets and accessories” product strategy. We worked tirelessly to develop a pipeline of trendsetting products with outstanding performance and design, a hybrid channel strategy and marketing campaigns with youthful energy to resonate with the masses. Just to give you an example, we understood the increasing demand for smart audio products from WFH consumers and launched more than 5 audio products after the lockdown to bring convenience to a large number of users.
Can you talk about the overall strategy, how you went about repositioning–if any–your products in the wake of the pandemic to stay relevant and appeal to buyers?
Realme as a brand has always studied the demands of its consumers and adapted accordingly. The pandemic brought about some significant changes in consumer purchasing behaviour, which in turn called for some adjustments to our product strategy and connected plans. Due to multiple factors, consumers are now inclined more towards budget and mid-range smartphones. All our offerings were received well by our customers and the response has been positive. We also saw increased demand for a connected lifestyle, and therefore introduced various AIoT products across wearables and hearables.
Which class of products saw the biggest traction in the wake of the pandemic?
We witnessed maximum traction for the wearables and hearables category. For example, the TWS market has almost doubled and smartwatch market almost tripled in Q3 compared to Q2 2020 due to the convenience they offer. Realme Smart TV also saw a high demand. We sold 1,90,000 units of our smart TVs during the festive period alone.
Which class of products saw the least footfall?
Compared to daily must-haves like smart audio categories, it’s a reality that smart home gadgets are still not widely known by the masses. Hence footfall is less. But that is where the opportunity also lies. We believe smart home gadgets are products that can really benefit consumers’ life, enabling them with a smart, connected life empowered by technology.
What were some of the biggest challenges for the industry in 2020?
From suspension of sales and manufacturing during March and April to disruption in the supply chain, increase in price of components, GST hike, suspension in offline and retailing expansion and unavailability of on-ground experience events, there were quite a few challenges that the entire industry, including Realme had to deal with.
However, the pandemic made everyone more conscious of the importance of smart gadgets, be it smartphones or smart audio, which did help people to connect with the world during the lockdown and fit into a new lifestyle.
Can you elaborate on the manufacturing and sales aspects, how all this was impacted by the pandemic?
Due to the lockdown in March and April and the suspension of sales and manufacturing, we lost one and a half month’s volume. Local lockdowns also restricted the movement of goods and the supply chain was disrupted.
Manpower disruption was also seen amid the lockdown. With the migrant workers, truckers and helpers going back to their hometown, it took quite some time to revamp the entire production cycle with necessary safety measures in place.
It was a small pause for everyone to review and update their plan. Now everything has revamped or we can say, we have fit into the new normal.
Are things getting better now–what lies ahead?
Our sales have revamped to how they were pre-lockdown. As is evidenced by Realme becoming the fastest brand to reach 50 million users globally. In the festive sales, we garnered over 6.3 million smartphone and 2 million AIoT users. Despite the initial challenges, 2020 has turned out to be a successful year for Realme.
Next year, our goals for success are set even higher. Realme aims to be (one of) the top 3 smartphone brands and No.1 online smartphone brand by clocking 25-30 million in sales in CY2021.
We estimate 25-30 million in sales is the minimum number that can satisfy the market demand for Realme with nice word of mouth and the improvement of brand salience. However, the stock issue will continue for the whole industry, among which the processor is the most crucial due to the impact of a pandemic, etc. We will try our best to deliver at least 25-30 million devices to the market however this has to be evaluated every quarter basis in the actual case.
We will also be focusing more on AIoT business to build a holistic ecosystem. We aim to launch 100+ new AIoT and lifestyle products in 2021.