Local smartphone brands challenge major brands in Emerging Markets
Emerging Markets like India, Pakistan, Bangladesh, Sri Lanka etc have long been dominated by established handset vendors like Nokia, Samsung etc. In the last few years, local handset vendors like Micromax in India and Sri Lanka, Qmobile in Pakistan and few other handset vendors like Karbonn, Spice etc have given foreign vendors run for their money. The local vendors would have completely routed them out of the market, had the foreign vendors not slashed the prices of their products especially the low-end and mid-end mobile devices.
The local handset vendors attacked the rural areas and B & C class cities. In rural areas, all handset vendors have a more-level playing field as most of the people in rural areas are illiterate. This simply means rural consumers are less influenced by press coverage or printed adverts from rich multinationals. Also the emerging markets consumers are culturally keen to buy feature-rich models at the lowest possible price-points.
Local players have undoubtedly made major dent in foreign vendors market share, but still lot needs to be done by the former to become the brand to reckon with.
- The major concern is how long local brands would be able to sustain in this low-margin, high volume mobile device business. These players will have to quickly rethink their product, marketing and service strategy afresh to put their house in order. This is precisely the reason that Indian vendors such as Micromax, Karbonn and Maxx have already tapped neighboring SAARC nations such as Bangladesh, Nepal and Sri Lanka and Latin America, Africa and the CIS countries.
- The other major concern is of the quality of mobile devices sold by local vendors. Almost all local vendors white label Chinese devices and sell in their respective countries.
- Besides established foreign vendors, Chinese vendors too are a threat to local vendors. Some of the Chinese brands are direct suppliers to the local vendors.