New Delhi-based Lava International, that sells mobile phones and tablets under the Lava and Xolo brands, wants a bigger bite of the fast-growing Internet mobility market. It has rolled out an aggressive business strategy, which the phone maker believes will help it connect strongly with the fast-growing, mobile Internet-savvy users. This will include rapid expansion of its mobility portfolio with stylish and sleek smartphones at affordable prices, deep focus and investment on improving marketing, distribution and servicing networks, and promotion of its own Android operating system-based user interface, called HIVE.
“The mobile industry has grown from a time when Nokia captured more than 80% of the market to this time where Indian brands are challenging the multinationals and slowly catching up in terms of market share,” Vishal Sehgal, co-founder and director, Lava International told FE in an interview. “The need gap is what gave rise to Indian brands. I believe that any consumer marketing organisation cannot make its business plans without knowing what consumer wants. If you are a consumer marketing organisation, you need to cater to the changing demand of customer, you cannot just keeping loving and praising yourself; be it the dual SIM phenomenon or Qwerty keypads. Lava was born in 2009 to fill this need gap,” he said.
Lava International is a fast growing mobile handset company in India. It has demonstrated quick and robust expansion since inception, showing profitability and growing sales since the first year of operations. Lava and Xolo are two brands that operate under the parent company. With around 11-12% market share in the Indian mobile handset market, Lava is expected to become a $1 billion (R6,000 crore) company by the end of the current financial year. It posted revenues of R2,909 crore in FY 13-14.
Lava is firming up its plans for the local manufacturing of smartphones in this financial year and has appointed Sanjeev Agarwal as chief manufacturing officer. He will play a key role in providing fillip to company’s plan of starting a manufacturing unit in India. Vishal said, “Make in India is a government-led campaign and we are excited to put that into action with right support from the government. The Noida facility is first step towards this Make in India campaign. We are looking to augment our Noida manufacturing facility and build a second one that would see the company invest around R150 crore in next two years.”
To begin with Lava will first start the assembling process, and later it will ramp up to complete manufacturing facility including tooling, SMT, painting and other areas in the second phase. The company intends to shift its manufacturing of smartphones (both Lava and Xolo) from China to India in a phased manner. It is planning to invest R500 crore on this initiative in next 2-3 years.
“The Chinese firms have always had an upper edge in hardware and we are soon going to catch up to that. However, in software Chinese have mostly been weak and Indians have an edge there. That’s why we have invested in software capacity since beginning,” Vishal said. Lava was the first Indian phone company to introduce its own user interface, HIVE, riding on the Android OS. “HIVE will be core element of our strategy. Software when well matched with hardware is going to drive the experience. HIVE will appeal to the 4th or 5th time Android users. The interface is for mature Android users who is looking for some customisation. Currently, HIVE is on higher end device….but slowly, in long run we will bring on phones starting 5K as well,” he said.
From a management trainee at Marico to CEO at Airtel Rajasthan, Vishal has seen business in its various hues. “We know that a battle is raging in this growing sector but we will survive the skirmishes. Samsung’s days are over and a domestic brand will be at the top of the market in two years,” he said. Further explaining his stand, Vishal said that Lava expects that it will be able to capture one of the top spots in two years with a 15-20% share of the total market. Currently Lava is in the fourth spot when it comes to all phones category and in the third spot in the smartphone segment. “Three years down the line, anyone with 15-20% market will be amongst top 3 players and that’s what we are aiming.”
In the smartphone segment, Lava will bank on its smartphone brand Xolo. “Metros contribute to more than 58% of the total business. Xolo appeals to tech savvy India, the young residing in metro cities and that’s why bulk of our marketing spend is on the digital side. We will keep expanding our Xolo series which has caught on really well. This year, we will do two flagship phones which will challenge the multinationals on technology. We are a product-centric company and we will develop smartphones for Indians and not tweak and sell a product originally made for a different country like most new players in the market are presently engaged in,” he said.
