Doing an Intex out of Zen Mobile will not going to be walk in the park simply because of the different times. Then market opportunity was huge, competition was less, and most importantly, the market leader, Nokia, was few feet away from its coffin
The employees of Zen Mobile, one more homegrown mobile phone maker in the lines of Micromax, Karbonn, Lava or Intex, and almost a dead company a year back, are beaming with confidence off late. They show no signs of exhaustion even if exposed to a day-long strategy meeting or do not hesitate if asked to put some extra work on a holiday or non-working day. Workers in the company who have been dragging their career for last 5-6 years for whatever reasons, are now feeling their patience would pay off. And all of this changed in last six months, since the management hired Sanjay Kalirona to head its mobile division.
Sanjay Kalirona is no magician but the industry has seen, and the employees of Zen Mobiles are aware, how the man changed the game for Intex in last 6 years. In Intex, Kalirona headed the mobile phone business, and played, perhaps the most crucial role, in making the Okhla based computer accessories seller into India’s # 3 mobile phone brand in such a short period. He took the company’s revenue from Rs 450 crore in 2011, when he joined Intex, to a billion dollar company in 2016, when he left.
Its no small feat, and the management and the employees of the Greater Noida based Zen Mobiles, are hoping a similar kind of turn around of their company that can stand tall among the current breed of mobile phone brands.
Whats Next For Zen Mobile Now
Products
Zen Mobile had launched its first range of phones in 2010 and the company’s last recognizable phone was launched 2013 – the Ultraphone 701 HD. Since then, till up to a year back, the company was almost non functional, though few units of feature phones were still going to shelves without seeing much success in sales. To take up a fight among the current competitive smartphone business in India, Zen Mobile needs to have its business structure redefined, to start with.
“That is my first priority now,” says Sanjay. “To put things in place.”
Being a pure sales and strategy man, his first priority was to put a proper product road map – kind of products that the company can associate with its target customers, its target markets.
“We have taken a conscious decision to focus on 4G smartphones only, besides the ongoing feature phones,” says Sanjay. And the 4G smartphones, he says, will be in the range of below Rs 7000.
“Our focus is not on competing with any smartphone brand but to cater to the need of people who want a decent smartphone in their budget,” he explains his strategy.
Local Manufacturing
And where to procure these phones from? China?
“No,” says Sanjay. “We have our own manufacturing units here in Noida.” Though Zen Mobile does not have its own manufacturing unit, the group that owns Zen Mobile brand has two such units – the Optiemus Infracom and GDN or Global Device Network.
GDN, besides Zen Mobile, also manufactures smartphones for LG and HTC. The GDN manufacturing plant has a capacity of producing 1 million units per month but at present it is producing 700 thousand units that includes smartphones for Zen Mobile, HTC and LG. Of the 700 thousand, 500 thousand are Zen phones, both feature as well as smartphones.
On the other hand, Optiemus has partnered with Taiwanese firm Wistron to set up a JV for contract manufacturing in India. The JV is planning to invest around Rs 1500 crore in next three years. Besides feature phones and smartphones, the manufacturing units are also producing accessories like power banks, batteries and headphones.
As of now, Sanjay says, 100% of its products are being manufactured locally, though some components have to be imported.
Distribution & After Sales
Third step, he says, is to strengthen the distribution channel of all type. The company, at present, is visible in all form of retail channels, be it physical stores, online retail system and television retail. The company’s product are being sold on FlipKart, Snapdeal, Shopclues as well as on TV retails like Homeshop, Naaptol and ShopCJ, besides being available in offline retail outlets.
In offline or physical stores, the company’s products are available at more than 30,000 stores across the country which, Sanjay says will be reaching to more than 50,000 by the end of this fiscal year.
“This is the backbone of any company dealing with consumer goods. At present, we are revitalizing our channel ecosystem,” adds Sanjay.
One more important aspect of making a successful brand, of any category, is to have a robust after sale service network.
“We are not going to be content with our post sales service and will keep improving it,” he adds. The company has a total of 750 service centers through third party network which Zen Mobile want to increase to 1200 by FY17. The company also have 24 L4 stores or company-owned service centers which will be increased to 50 by end of this year, Sanjay says.
Revenue
The buck stops here. All of your efforts, business acumen and strategies are being questioned unless the same translated to revenue at the end of the business hours, or fiscal year. Sanjay says when he joined Zen Mobile in July this year, the company’s sales were 3 lakh units per month, which in mere 3 months have increased to 5 lakhs a month, which is also translating in revenue.
“Our revenue last year was around Rs 600 crore and we aim to reach Rs 850 crore by end this financial year,” adds Sanjay. And he sounded confident.
But It Wouldn’t Be A Cakewalk
Its certainly not going to be easy doing an Intex out of Zen Mobile for Sanjay simply because of the different times, even if we discard the other factors. In 2010, when he joined Intex, it was the initial phase of India’s entry to smartphones. Market opportunity was huge (Remember, we have 1.2 bn population) and competition was less as there were 4 or 5 global brands operating in India. And most importantly, the market leader, Nokia, was few feet away from its coffin. All these factors paved almost a smooth path for every Indian brand – be it Micromax, Karbonn, Lava, Spice, Intex or Videocon – to be successful in home ground.
But things are not the same now. The market is flooded with Chinese smartphone players. And for a change, their products are not bad in quality. And the big names from the Indian breed are struggling to cope up with the foreign frienmies. Micromax, that has been the number 2 smartphone brand in India, for last 2 years, has slipped to fourth position paving the way for two Chinese brands – Lenovo and Xiaomi, to be placed below market leader Samsung. Intex, the #3 phone brand is expected to loose upto 40% of its revenue in this fiscal, though its problems are more internal than external.
Hence, things may not turn up as expected for Zen Mobile or Sanjay Kalirona. He needs something different for his company, tapping the right market or bringing out the right product, or, simply doing both, may be prove a fruitful gamble for him. A tough yet possible path ahead.
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