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Indians are more feature and price conscious than they are brand conscious. This fact drives the Indian mobile market, which caters for 100 million handsets annually, to more than 600 million users. The gray market in India has been flourishing, offering innovative feature rich phones in a low price range. While the invalid IMEI debacle last year has had a lasting impact on the gray market, it has also paved the way for the rise of Indian local manufacturers who now take their cue from the shanzhai.
The Indian phone market is flooded with handset manufacturers, with new ones debuting almost every week. Micromax, Fly, Maxx, Spice, Karbon … they may be unheard of in the rest of the world, but they are budding Indian handset manufacturers who together constitute 15% share of the Indian handset market. There are currently around thirty to fifty players in the market and the number is growing each month. Kunal Ahuja, CEO of Spice Mobiles, worries about the flood of white label mobile handset manufacturers in India, “Anybody and everybody is launching a mobile phone brand. This is not a short-term game, a lot of them are not going to survive tomorrow."This is a recent phenomenon. Multi-national mobile handset manufacturers like Nokia, Sony Ericsson, Samsung, Motorola and LG dominated the Indian mobile handset market for several years. They offered basic mobile phones available in an economical price range. There was a huge demand for feature rich cheap phones in India and that helped the shanzhai to flourish and hold 15% of mobile handset market for many years.
Then the invalid IMEI directive banned phones with false and invalid IMEI numbers. This all but wiped out the cheap unbranded shanzhai handsets from the market. Two million phones stopped working and the supply of shanzhai phones almost vanished because of the IMEI regulation, but the demand continues to grow. After the IMEI directive, India has seen a burgeoning rise of local small and medium handset manufactures who are now fiercly competing against multinationals, giving them a run for their money with unique handsets offered at competitive prices.
The rise and fall of the shanzhai in India actively helped these companies surface and in some cases the shanzhai are still intimately involved. There are a bunch of domestic players buying handsets in bulk from shanzhai manufacturers in China, Taiwan and Hong Kong, and then remarketing them under their brand with warranty and post sales support.
Another promising group of manufacturers design their own phones around the cellular chipsets imported from Chinese chipset companies like MediaTek, Qualcomm and Infineon. Shanzhai’s very own chip king MediaTek is the main supplier of chips for Indian mobile handset manufacturers. Nearly 20 mobile brands in India use MediaTek chipsets in their phones including Micromax, which is currently the third largest mobile brand in India after Nokia and Samsung. Vikas Jain, Business Director of Micromax points out, “Of course, we owe a lot of our success to Mediatek.”
He continues, “There used to be a time when you would have had to get your chipsets from Infineon or Qualcomm. Now we have Mediatek and a large part of their success is because of the ease with which their basic designs can be altered. They give you about 60 percent of the design and you add another 40 percent of features, opening up the possibility of innovation at your level."
India’s USD 10 billion market was limited to only five players in 2008, but is now dominated by players like Micromax, Karbon, Maxx, Lemon Mobile, Wynncom, Zen Mobile, Lava, Videocon, Airfone, Spice Mobiles, Movil Mobiles, Intex Mobiles, and Olive Telecom. Micromax has emerged to be the third major brand in India and top players like Nokia, Sony Ericsson and Motorola together lost nearly 30 percent share in two years.
Why was there such a big shift in market? The reason is, Indians hardly care about brand, they place more importance on features and price. But there is another reason for domestic players leading the show. The shanzhai are responsible for bringing innovation to Indian handsets, handsets available at an affordable price range, but still boasting exclusive features. Dual SIM phones have created a niche for domestic players, further strengthened by QWERTY, touchscreen, Facebook, chat, music player and video player features.
Take a look at some of the offerings in the Indian market. Dual SIM phones are selling like hot cakes and quickly gaining popularity are the triple SIM phones from Intex and Olive, whilst the Lava B5 can let you enjoy typing in ABCDE format with an alpha keypad if you find a QWERTY confusing. How many days can your phone work before running out of battery … say 2-4 days? The Micromax X1i and X1u and Intex IN 2020 can last for an entire month! Actually with the Olive FrvrOn mobile, you don’t need a battery at all, it can be eternally on with normal AAA size batteries!
It is easy to spot two camera phones like the Intex IN4470, or one with an Analog TV tuner such as the Zen Z82. If that’s not enough the Videocon V1300 phone is enabled with UV light to check for counterfeit currency. Some Videocon phones are equipped with voice morphing and background noise simulators (for those of you leading a double life!).
Movil has launched the Movil MA1 phone with shock sensors and shockproof features. Lemon Mobile’s Duo 401 phone has a unique shake control feature to manage the in-built music player.
The best part about these phones is that almost all of them are available for under INR 5000 (nearly USD100). These phones are not available in the gray market, you’ll find them in the established showrooms like Croma, Ezone, Universal Cell, and The Mobile Store. It’s no surprise now if you catch a ‘rickshaw-walla’ (taxi driver) on the local street in India enjoying a movie on his phone, or some college kid showing off a glossy touchscreen come QWERTY phone, or even an accountant checking for counterfeit currency at the bank. Indians owe a lot of these innovative products … and their set price range … to the lead-in that the shanzhai gave.
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