1. We will be dead if we do not manufacture: Chairman & MD, Lava International

We will be dead if we do not manufacture: Chairman & MD, Lava International

Hari Om Rai, chairman and managing director, Lava International, spoke to FE’s Anup Jayaram on the way ahead for the brand.

By: | New Delhi | Published: November 12, 2015 12:14 AM

Over the past few years, Noida-based Lava International has emerged among the top three Indian mobile handset vendors. It is now present across large parts of Asia and is all set to manufacture handsets within the country.

As part of that, it is setting up a large plant in Noida, where it already has a small facility. Another plant is slated to be set up in South India soon. Lava, which clocked a shade under Rs 7,000 crore in revenues during 2014-15, is also building on the design of devices. Hari Om Rai, chairman and managing director, Lava International, spoke to FE’s Anup Jayaram on the way ahead for the brand. Excerpts:

Lava is among the top domestic handset brands. How do you see yourselves going forward?

In India we are among the top three local brands. We are the number two brand in Bangladesh and I have heard that we have exceeded Samsung in Thailand. Today a third of our revenues come from overseas operations. That should increase to half this fiscal. We are now present in South Asia, the Middle East, Thailand, Indonesia, Myanmar and Mexico. The next will be Africa

and we are already looking at the US. We will be in China also one day. Technology will change, but that is just one part of the business. As far as we are concerned, it is the culture that matters. We’ll give people what is relevant to them.

You have been focused on manufacturing in India. What is the current status on that?

Our one plant has already started manufacturing in Noida. We are setting up a large plant again in Noida and a third one will come up in South India. For the bigger plant in Uttar Pradesh, we are in the process of finalisation of contracts. The state cabinet has already approved it. We are the only company that has the ability from design to manufacture. So we will play a big role as a catalyst to build an ecosystem to design, supply and manufacture. Right now we are hiring engineers. They will be trained in our Chinese company. We will be the first company to formally start designing in India. That takes a long time to establish.

With so many announcements, do you see a huge manufacturing potential in the country?

Manufacturing will be shifting from China and India has great potential to fill in the gap.

The next four-five years are when India will look to build its manufacturing. The captive consumption in the country will help us to build the manufacturing capability. Eventually, competition will come into play. What I know for sure is that we will be dead if we do not manufacture. That is the catalyst. After China, if there is a place that has potential, it is India.

Over the past few months, the demand for smartphones is rising. What do you see happening to feature phones?

If one looks at the value a smartphone provides and the price points at which it is available, I think the smartphone era has just begun in India. But feature phones will still be used by the older generation.

For India we think it will not be just digital, but a mix of online and offline. We are not America, we’ll have a mix of online and offline.

It is not just selling the device. Even apps will be sold offline, because apps will be consumed offline.

Today with lot of offline sales going online, everyone is talking about online.

The way I see it, it is going to be very balanced between the two.

What do you mean by an offline app?

In Rajasthan and Madhya Pradesh, we have started a programme called Lava da tukh, where we tell people in rural India how to use a smartphone and what values it can bring. Even if you cannot write or type, but only speak, the phone can speak back to you and help you search. It brings a lot of value.

Today there are apps by which you can convert your credit card to digital cash. But that according to me is not going to be important for India. If we can take hard cash and convert it to digital, that is going to be very important. We have the potential because we are already connecting at 100,000 shops.

These are going to be mobile shops from where we can burn apps in the product, not only in what we are selling but also in other products. Then we collect cash and give him digital credit through retailers. That’s how India works.

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