China vs China; the new mobile war
The man wearing his trademark black shirt and jeans bounds up on stage to a customary standing ovation that borders on hero worship. The audience is spellbound as he starts talking...writes Rajiv Makhni.brunch Updated: Aug 17, 2013 17:00 IST
The man wearing his trademark black shirt and jeans bounds up on stage to a customary standing ovation that borders on hero worship. The audience is spellbound as he starts talking and there is singing, dancing and fevered fan worship all around. Very aware of the frenzy he’s created, the man takes the pitch to an all-new level by announcing that his company’s brand new phone has sold out in 90 seconds flat and now has a waiting list of 7.45 million bookings! He’s got his audience completely mesmerised and almost under a hypnotic trance as he starts to reel off unbelievable sales numbers as well as giving out teasing little details about the next phone ready for release.
You would think that I may be recounting some old story about Steve Jobs, but you would be wrong. The man’s name is Lei Jun, the company’s name is Xiaomi, the phone model that got sold out in 90 seconds is called Hongmi. And if you haven’t heard of any of this before, then don’t worry, you will very soon! All of this is happening in China, the world’s largest maker and consumer of mobile phones, including smartphones (it just uprooted USA from that mantle).
An Unbelievable Story
The Xiaomi story is unique, one that is almost impossible to replicate anywhere else. The company introduced its first Smartphone just two years ago. It only sells online. It has zero retail presence. It has a waiting list of about two to three months on every single mobile phone it sells. It artificially controls its supply to make sure that the hype and demand are always way above. It outsells Apple and is about to outsell Samsung in smartphone sales in China and it’s going to sell about 20 million smartphones by the time this year draws to a close. And this company, with its unique strategy, is ready to spread its wings and hit international markets including India.
India Is Hot, And we don’t mean the weather
Two weeks ago, I wrote about how Chinese frontline mobile phone manufacturers have sprouted new ambitions to enter the Indian market under their own name. Almost every one of them was the original equipment manufacturer for an Indian brand but now doesn’t want to be just another unknown backstage supplier. About a dozen Chinese brands are all set to invade our shores and takeover what is now considered to be the next goldmine in smartphones. India is hot, India has the numbers and India is about to feel the Dragons breath!
These Chinese companies will now be going up against the very brands that they were supplying phones to just a few months ago. This almost oxymoronic situation will also trigger an incredible effect in the Indian market.
The first will be a true price war that has never been seen before. Most Chinese brands have a huge economy-of-scale advantage as they manufacture a single phone for multiple countries including China. To spin off an additional 1,00,000 phones for India at prices that are unheard of is the story that will start panning out very soon. Expect some amazing phones at prices that are truly jaw-dropping as effect one. Great for all of us, especially for economy smartphone buyers.
A Media Blitz
Chinese brands do have to counter a few disadvantages when they enter the Indian market. Consumers in India still look down upon ‘China-made’ and these brands have distinctively Chinese names. And typical of how Chinese companies operate in a cocoon of their own, these aren’t brands that anybody in India has heard of. Also problematic is the popular perception that these Chinese brands make phones that are built for spying for the Chinese Army. Expect a media blitz all over radio, TV, magazines and newspapers with all kinds of tongue-twister oriental names blazing on top as effect two. Wonderful news for media and TV companies, plus your vocabulary is going to get some lessons in languages across the border.
Awesome and Amusing
More importantly, these Chinese brands are going to enter a market already saturated by giants that have fantastic consumer loyalty. To combat brand loyalty, you’re going to see some fantastic new features that these Chinese brands will introduce into the Indian market.
Some are going to be great (Automatic OS updates over the air that give you new features every week) and some are going to be very gimmicky (phones with 3D projection, phones with snap-off cameras, phones with add-on speakers). The market is going to explode with differentiators in each phone released and this will be effect number three. Differentiators that break the monotony of ‘every phone seems the same’ are a welcome relief – and some are going to be extremely amusing. You may not buy one – but you’re going to get a good laugh out of it.
One more battle the China Invasion is going to have to counter is that most brands already present in India already have a great dealer network, excellent retail presence and a good network of service centres across the country. To counter this you’re going to hear about some truly strange partnerships. Some of these brands will come into our country as a joint brand which may well be with the same company that they were supplying to earlier. That would be effect number four. While confusing in the beginning, two mixed-up name brands in mobile phones (MicromaXiaomi? KarbOppo?) is something you’ll have to live with!
Flipping the Question
Last week I asked you if you were ready to buy a phone ignoring specs and based on user experience. Today, I’m flipping it and asking a different question. Are you willing to buy a phone from a brand you’ve never heard of before? Especially if it’s got a waiting list of 7.45 million other people?
Rajiv Makhni is managing editor, Technology, NDTV and the anchor of Gadget Guru, Cell Guru and Newsnet 3
From HT Brunch, August 18
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