We are unconventional in our offline expansion: Realme India CEO Madhav Sheth

Updated: Sep 20, 2019 4:06 PM

Realme has been successful because of our focus on the product; many brands don’t focus on the product anymore. We have grown 850% y-o-y; from the second quarter of the year until August, our sales have increased 300%.

Realme, Realme India, Realme CEO, Madhav Sheth, industry news, smartphone, smartphone brand, Realme India CEO Madhav Sheth

Smartphone manufacturer Realme has emerged as the fourth largest smartphone brand in the April-June quarter, according to Counterpoint Research. While the company has so far focussed on selling online, it now plans to tap offline retail and enter the accessories business to fuel growth. Madhav Sheth talks to Devika Singh about restrained investments, being  sensitive to pricing, and more.

Realme achieved 9% market share within the first year of launch. What did you do differently?
Realme has been successful because of our focus on the product; many brands don’t focus on the product anymore. We have grown 850% y-o-y; from the second quarter of the year until August, our sales have increased 300%.

Meanwhile, the sales of other players are either stagnant or declining. Several smartphone brands have shut shop because they only talked about specifications on paper and not about consumer experiences. We know what the user wants, and if we can offer a better product in a particular price segment, we will do that, instead of foraying into a higher price segment.

Furthermore, we have a unique after-sales service where we offer doorstep pick-up and delivery for the repair of phones. We have also piloted an express service in eight cities, with plans to expand it further. As per this, the customer service agent will arrive at your house and repair the phone in 30 minutes. We aim to be the No. 3 smartphone brand by the fourth quarter.

What is your customer acquisition strategy in such a competitive market?
The most effective way of acquiring customers is word of mouth. Also, when we entered the industry, good design was missing in smartphones across price segments; primarily, only the flagship devices enjoyed good aesthetics and design. We brought out well-designed phones even at a price point of Rs 5,999 and these were not your average toned-down versions of any flagship device.

Companies such as Xiaomi as well as your sister brands Oppo and Vivo have been making sustained investments in the offline space. Will Realme follow suit?
Realme does not compete with brands, but the devices in each price segment. We are being very unconventional in our offline expansion; we are not spending a lot of money. Our margins are, perhaps, the lowest in the industry. We work with offline retailers at a low margin of less than 4-5%. With lean structures and lesser margins, we can always keep the product pricing very competitive.

Currently, we are at 7,000 stores and will expand to 20,000 stores in 180 cities by the end of this year. We also plan to launch six to eight of our own stores in the second half of the year, along with kiosks, which are small experience stores to showcase our new range of accessories. We are targeting 30% sales from the offline segment, going ahead. We have also invested in India by appointing actor Ayushmann Khurrana as our brand ambassador.

Most of your online sales come from North India. Is the offline expansion aimed at tapping other locations?
We are planning sustained expansion across India. We are leveraging Southern large format retail chains to help us boost our presence across the South region. In the West and the East, we have most geographies covered. We’ll use the festive season to ensure a pan-India presence.

Why haven’t you extended your offline presence yet?
Our offline presence is limited currently as we have largely been present online. Our offline journey started because there was demand in tier III and IV towns, but there was a lack of access to our products. This is the reason we want to have Realme devices available widely across points of sale. Our experience stores are launching initially in the metros, but we plan to expand them further.

What prompted you to enter the accessories space? What kind of products are on offer?
We have introduced earphones, wireless buds, power banks, tote bags, phone cases and backpacks. We plan to launch more accessories in the future. For us, 2020 will be about mobile phones and accessories. We want to ultimately become a lifestyle products company.

Although devices will be a major business for us, our strategy lies in addressing our target group — the millennials — better, considering that young India is driving growth in the consumer electronics category. We have showcased the same in our current line-up and will continue to do so.

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