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Indian handset brands have taken on their multinational rivals
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#1
Quote:Indian handset brands have taken on their multinational rivals. Can they survive in the long run?

The unthinkable has happened. In less than two years, a clutch of Indian brands like Micromax, Spice, Karbonn, Zen and Lava have snatched 14 per cent of the mobile handset market from multinational corporations. This, mind you, has happened when the market has expanded from about 8 million handsets per month two years ago to 10 million a year ago and almost 11 million now. And their share could grow further in the days to come: In China, local brands have around 20 per cent of the market. So there is headroom for them to grow.
Some of them have begun to attract talent from top-notch institutions like the Indian Institutes of Technology, Indian Institutes of Management and Indian School of Business. Their advertising budgets run into hundreds of crores of rupees, and well-known Bollywood celebrities endorse some of these brands. Almost all of them want to replicate their success in South-East Asia, Africa, West Asia, South America and East Europe — such is their confidence. Rivals from overseas have been left with no option but to give a hard relook at their business plans for India.

Of course, there are no entry barriers in this business — one reason why private equity is not yet convinced that there is a great business model in the making here. Indeed, over 50 brands have joined the bandwagon in the last few months. Handsets can be sourced from China for as little as $16 and brought to India after paying an import duty of just 1 per cent. Even the cheapest handset offers a net profit margin of Rs 200. If you manage to sell 50,000 handsets, you could make Rs 1 crore in a month — not bad at all. No wonder, Micromax and Lava claim to be profitable already. (They refuse to disclose numbers because they are closely held.) But experts reckon increased competition could bring the profit margins of Indian brands down from 10 per cent now to below 5 per cent in a year’s time.


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#2
Ya But Reliability Is An Issue... If Indian Company Resolves This Then They Will Be Superhit...
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wIcKeD mEnTaLiTy
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