Indian consumers want best of 'touch', says Sudhir Hasija of Karbonn

Launched in 2009 Karbonn today is the third largest smart phone brand in the country. By Q4 2013 it had a product portfolio spanning over 225 feature and touch phones, over 65 smart phones and more than 10 tablets. Karbonn is present in 40 countries and plans to broaden its international footprint by expanding to 65 countries by mid-2014.

Firstbiz spoke to Sudhir Hasija, Chairman of Karbonn to understand the mobile manufacturer’s growth plans and pulse of the Indian consumer today. Excerpts from the interview.

FB: Media reports suggest that you will be diluting 15-20 percent stake to private equity firms to fund expansion plans.

Hasija: We are still thinking, we have not frozen plans with anyone. We have been approached by many for some years now, but are waiting for a good valuation. We’re aiming at Rs. 8,000 crore in revenues for next fiscal. We’ve been achieving our revenue targets and doubling growth for three years now. The bulk of growth will come from smart phones. Sales in this category of mobiles have been increasing rapidly in India. We recently announced a tie-up with Google for Android One project which we expect to be a game changer. We’ve just launched in East Europe-Romania, Ukraine, Russia and also in Mexico, where we have tied up with an operator. Recently we secured a huge order from Mexico, however, I cannot disclose numbers.

FB: What’s on priority in your plan of action?
Hasija: We will like to put up a manufacturing plant as we have the economies of scale. Also, I want to increase our Research and Development unit with 400-500 people and have in-house design as well. We plan to invest a few hundred crore rupees in our R&D.

FB: What hurdles do you face as a manufacturer and has the budget addressed them adequately?
Hasija: The problem for mobile manufacturers in India today lies in the supply-chain side. There’s hardly anything much available here - we need to depend on outside nations. We get our phones made in Korea, China, and Taiwan. The Government must encourage the industry to come here now. If I set up a factory in India, and if even one component is missing, my factory will stop functioning. Infrastructure is so well built outside and there are enough vendors for every single component.

The first budget of the new government is forward-looking and geared towards developing a robust India. There aren’t any direct incentives for the mobile phone industry, which is a letdown.

FB: Why is East Europe an attractive market for Karbonn and what is your entry strategy there?

Hasija: East Europe is picking up where sales of our products are concerned. Our entry strategy is the same as in India through our distributor network as well as online. There is a very mature segment of online shoppers unlike India where e-commerce is getting established only now with big inroads. Online gives us a very fast push, straight to the consumer. Digital media too is strong there.

FB: Where are your big markets in India today?
Hasija: Around 30 percent of our smart phone sales come from metros. There was a time when an Indian feature phone brand was accepted at Rs. 3,000. We launched Octane at Rs. 16,999 and the response is not bad so far. In tier 2 and 3 towns, these products are priced up to Rs. 7,000-Rs. 8,000 and do well. The biggest market for smart phones in India, for any brand, lies in the Rs. 5,000-Rs. 8,000 range.

FB: How many launches can we expect from Karbonn this fiscal?
Hasija: Around 8 to 20. The maximum launches will be in the Rs. 7,000-Rs. 10,000 price bracket. At least five products will be in the Rs. 15,000-Rs. 20,000 range.

FB: Tell us more about your partnership with Google’s Android One project.
Hasija: It’s a dream partnership. This will open doors for us all over the world. We’re planning our first launch by Diwali this year and the device will be in the Rs. 10,000- Rs.11,000 range. Our product is still in the infant stages of development, but the way enquiries have been pouring in from world-over is phenomenal.

FB: Who is your biggest buyer today?
Hasija: Those in the 18-35 age bracket. And most of this generation is in India. Population in Japan and China is getting older!

FB: You’re also entering the smart wearable device market?
Hasija: We are trying to innovate and I am working on a design of about 2.8 inches, which will be quite comfortable and usable. We will launch by end 2015 and will be priced at $150 with all features of a smart phone.