Demand for smartphones is on the rise, but feature phone market will also continue to grow, says Zen Mobiles CEO

We spoke to Zen Mobile CEO Sanjay Karilona, on the feature phone segment in India and the importance of local context. Here are excerpts from the interview

The smartphone market in India is growing at a phenomenal pace. But at the same time we still have a lot of users, specially in Tier II and Tier III towns where feature phones still outsell smartphones. Zen Mobiles is among the well known home-grown phone maker. With over 30 running feature phone models and 10-12 running smartphone models, Zen Mobiles certainly sees value in the feature phone segment.

We spoke to Zen Mobile CEO Sanjay Karilona, on the feature phone segment in India and the importance of local context. Here are excerpts from the interview.

 Demand for smartphones is on the rise, but feature phone market will also continue to grow, says Zen Mobiles CEO

Sanjay Karilona, CEO, Zen Mobile

tech2: Is there a still a huge market for feature phones in India?
Karilona: India is one of the largest mobile phone markets in the world with almost 65 percent of the market currently captured by feature phone segment. This figure clearly shows that the feature phones market has a strong presence in India, mainly in Tier III cities and smaller towns. They are not only affordable, but also offer multiple features that allow users to stay connected at all times. At Zen Mobile, we are constantly working towards offering the best features at a competent price point across all the segments.

When the country is moving towards digital lifestyle and superfast connectivity with the adoption of 4G enabled devices, smartphone makers are now helping the feature phone users' transition to smartphones helping them live a seamless digital life.

tech2: Do you have plans for localisation of devices in more Indian languages?
Karilona: We believe, that in order to increase the adoption of smartphones in India, it is important to offer features in local languages. As part of our strategy, we recently launched 4G devices – Cinemax Click, Admire Thrill and Admire Dragon ranging between Rs 4,600 to Rs 6,190. All these devices have multilingual capabilities in over 20 languages including Hindi, Punjabi, Urdu, Gujarati, Tamil, Telugu, Marathi and many more. We’ll also be strengthening our multilingual devices portfolio in feature phone segment too; even currently our Feature Phone devices have multilingual capabilities in over 13 regional languages.

tech2: How do you plan to scale up in the Indian market?
Karilona: Being a home grown company, India is the most important market for us. We have a robust distribution and sales channel that we would like to leverage and reach out to a larger set of consumers. Currently, we have close to 350-400 partners pan India and are planning to double this figure. In the retail segment, we currently are present at 20,000 retail stores and by end of this financial year we are targeting to reach out to 30,000 retailers. We are currently focusing on expanding our 4G device portfolio and establish a strong presence in tier II and tier III markets across the country.

tech2: Any specific targets or revenue expectations?
Karilona: As per last quarters IDC report, Zen Mobile’s shipment had doubled and we want to maintain this growth momentum in the coming quarters, as well. We will move ahead from here and keep building our base to move upward with 20-25 percent growth on month-on-month basis. The growth in revenue will mostly come from our strong product portfolio in Smartphone category, mainly 4G enabled devices.

tech2: How is the feature phone market shaping up in India and how are you contributing to the segment?
Karilona: Feature phones continue to be preferred by people living in small town and rural areas who do not have a high purchasing power unlike people living in urban India. As per CMR, more than 50 percent of the mobile phone market in India is dominated by feature phones, they are not only relevant to the current scenario but are here to stay. Also, with the emergence of Chinese players in the last couple of years, home-grown equipment manufacturers are heavily counting on the feature phone for maintaining stability.

Additionally, migration from feature phone to smartphone has slowed down, helping India based vendors to maintain their dominance in the overall mobile phone market. Even now, majority of our sales is from feature phones and in the last quarter we had doubled our overall mobile shipment due to increase in demand of feature phones.

In addition, we have introduced several new applications on feature phone, like Mobile banking facility which will enable users to conduct their normal banking transactions by simply dialing *99#. A feature phone user wants long battery life and good speakers so we will continuously innovate on these aspects.

tech2: Given competition from several Chinese brands, how do you plan to stay relevant?
Karilona: For smartphones, factors affecting consumer choice apart from the strong build quality, amazing features, and premium experience is the price of the device.

At Zen Mobile, we offer a rich portfolio of mobile devices ranging from 30 running models in the feature phone segment and around 10-12 running Smartphone models. With the introduction of 4G smartphones, we aim to offer a diverse range of devices at varied price point. We also boast a robust offline and online distribution, sales network that allows us to reach out to the right consumer sitting in tier II and tier III markets. Going forward, we want to ensure that all sections of society can contribute and benefit from digital revolution.

tech2: Any emerging trends in this space?
Karilona: The year 2016 has been very interesting for the smartphone industry. India became one of the fastest-growing smartphone markets in the world, also, there has been a huge traction in terms of sales through online channels during this festive season.

Going forward, we will see consumers migrating to smartphones from feature phones as the appetite to absorb content/data online, transaction of products and services via online platform will increase. We believe, Tier II and Tier III cities will play a major role in accepting the digital transformation thus fueling smartphone sales. There will also be a surge in adoption of 4G smartphones and this segment will grow.

The Indian government is also taking proactive steps to ensure that India is 5G ready by the time it is commercially rolled out in 2020. The 5G technology will revolutionize the technology space in the country. We believe that India can quickly accelerate to 5G, and the capabilities of 5G is so eloquently aligned with the Prime Minister's Digital India vision in that it's going to be the fabric that drives concepts such as Smart Cities, autonomous navigation, and the ability to distribute data in a manner which allows new use cases and applications to be performed.

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