November ends. The woes of the mobile industry do not.
Murphy’s law says: “If things can go wrong, they will go wrong!” and this is exactly what has been happening in the Indian mobile industry since October.
1. Online – The Challenger! Online channel, being on the attack mode, is severely affecting offline channel partners specially the Brick and Mortar stores.
I have been called, bombarded with WhatsApp/LinkedIn and text messages from channel partners on their anxiety and plans to exit the business. While I feel sad for them, I try and hand hold them.
2. Comio’s Exit Fuels The Fire I believe a lot of people including the Indian team knew this was coming, but did not react fast enough.
3. #OppoIndia’s MD Opts Out!
This was not expected, but as recently clarified his exit had nothing to do with the losses. In fact, the President of Oppo – Charles Wong – stated in an interview a couple of days back that Oppo is going through an investment heavy phase with a clear India strategy. While it could be an uplifting move for the brand, my views on the team and their strategy to segregate the two brands – #Oppo and #Realme, still hold true. Read my blog on this here: https://bit.ly/2PgfhKE
4. Hipad factory workers go on a rampage due to loss of jobs.
5. Salary disbursements savaged! Salary cuts of employees from top to bottom in some companies. I think #ZioxMobiles is one of them. Delayed salaries by #Lava which a lot of people said was the only Indian company that could pass this litmus test. Remember my post on Lava’s statement on launching phones till Rs.14000, being outlandish.
There may be others I have missed but these should set the context for today’s blog.
While all of this is happening, and awards are being given for causing this “disruption” by publications. But what is this so-called disruption they have done? Brought down the price:specification to get a share of the pie, causing huge collateral damage, not only to their mother brand, but to each and every brand irrespective of the country they belong to. This had a cascading effect on their vendors, employees – both on and off rolls – and God knows who all.
So is Disruption the need of the hour? No!
If one looks up the dictionary, it defines disruption as – disturbance or problems which interrupt an event, activity, or process.
disturbance, disordering, disarrangement, disarranging, interference, upset, upsetting, unsettling, confusion, confusing;
disorderliness, disorganization, turmoil, disarray;
interruption, suspension, discontinuation, stoppage;
obstruction, impeding, hampering, spoiling, ruining, wrecking, undermining;
holding up, delaying, delay, retardation "he was exasperated at this disruption of his plans"
All the synonyms or the sentence used above as an example, are negative. But why think negative? Shouldn’t we rather focus on the positive and reward disruption’s antonym – #Rejuvenation.
This kind of disruption cannot continue for long, and not good for the brands or the channel.
If there is the one company which executed Rejuvenation to its best, it was not a multinational, but our homegrown brand – #Micromax. Keeping the end consumer in mind at all times then-Be it the company’s vision or product categories, pricing strategy, channel and team restructuring for smartphones or marketing, with everyone from the founders to Business heads fully aligned. 2011 to 2015 was a period of Rejuvenation of the industry and Micromax was the catalyst for all others.
The result was obvious- Micromax became the No.1 brand within 2 years of launching smartphones in 2013-14. No one has been able to match that success story till now, even considering the fact that the competition may have been much lesser then.
Rejuvenation is the need of the hour and we have to see how can brands and channel execute it.
Issue: Specification or technology benefits will be limited to first mover advantage – with the Global top 10 brands ruling this domain with their dedicated R&D setups.
For others, the exit gates are open and we’ve been witnessing this as it happens. Refer: Comio’s Exit From India. Read here:<>
Rejuvenation: 1997-2003 being the initial phase of commercialisation of mobile phones saw the explosion of creativity and product innovation. Phones that looked like tubes, ovals, cubes or squares, folding Phones – all created massive media interest and heated debate among consumers. The industry was alive with experimentation and daring concept models that were supposed to create a halo around more mundane phones. #Moto Razr was one such phone.
Then came another wave between 2007 and 2011 when #HTC came up with some beautiful differentiated IDs – Sliding phones, phone with curved chins, QWERTY phones with touchscreen.
It's time you change the looks, guys. Play around with the IDs. Maybe get designers
Go Retro-See what #Nokia did with their 3310 and the banana phone. They have done incredibly well to the extent that all brands are making copies of it.
Rejuvenate. It’s important.
Issue: Brands fighting purely on price:specification equation with most making losses barring a couple of brands that are making nominal profits. How dangerous can this be is explained in my blog on Samsung. Read here: <>
I always believed that the health of the channel partners depends on the health of the brand. If the brand is not healthy, this contagious disease will hit their partners as well who will also fall sick sooner than later. Best examples – #Gionee, #LeEco and the latest one being #Comio. My blog on Comio's exit from India - https://bit.ly/2DUq0Z4
Rejuvenation: For a change, give more and charge more and tell the customer why. Customers who come to you for a price will leave you for a price. If the ASP is moving up, it shows customers are willing to pay more if you have a proposition.
This will be a tough one, but if one can crack it, it will be a classic case study on Rejuvenation.
Whatever you may say about the brand pull etc., Nokia could sell its 3310 at more than double the price of a normal feature phone. If they can, anyone can. Just need to put on your thinking caps.
Issue: Online will remain. For offline, brands will talk about WoD, DoD, manpower and investments (I am hearing demands of abnormal investment figures based on a 2 month success story with minimal returns from a new online brand going offline). While all of these are important in the interest of business, there has to be a logic which needs to be understood. No understanding, no going ahead. Don’t be desperate. You will regret, be it the brand or the channel.
Rejuvenation: Understand that online is there to stay, but is making losses. Offline being at a smaller scale cannot take losses. If you can’t fight them, join them. Think of ways to align with online. Tie-ups of global online organisations and #Jio with Indian retail to also have an offline presence will only make things more difficult.
Use the services of #AIMRA to talk to the government and the brands on a macro level. At the micro level, do some things from your side as well. Be selective, be it brand, inventory and debtors. Keep your eyes and ears open to react fast.
Possibly have a local distributor meet once a month. Spread your risks to 2-3 brands, if possible, with due diligence.
Brands need to keep on reinventing their channel strategy. No need to hire so-called professional agencies to do this. You need people who know that market at the ground level. They can all come under an umbrella with a good leader to do it for you at a cost much lower than what you might be paying. There are enough and more good people looking for opportunities in the difficult times created by this disruption. Let us also Rejuvenate them as well. 😊
Think of what offline can offer which online cannot. Just sitting back and waiting for the government to step in will not work. Matters need to be handled directly by offline.
Learn from #Xiaomi. They have evolved and continue to do so in offline. Read my Facebook post on their latest approach to offline. Not the conventional one at all.
It was a great thing to have a campaign shot in foreign locales, taking Hollywood stars as Brand Ambassadors at one time.
Then it became about Movies (Bollywood stars as brand ambassadors or at launch events), Music (mostly event sponsorships) and Sports, mostly Cricket.
In terms of campaigns, the first one which created a lot of vibrancy for the brand was the Blackberry Boys one. #MicromaxCanvas2 had a tremendous emotional impact and one cannot take away the credit from marketing also contributing to the product’s success. And after that – Nothing much to write home about.
Use your marketing assets and properties better. Like I mentioned in my previous article and quoted by someone I rate very high, “There is a lot of scope of better utilisation of the assets and properties some brands are sitting on today which are already paid for.”
There are champion marketeers with tremendous understanding of brands and product strengths and changing consumer insights. Together with sales they can really change the game.
Please do check out the HP TV Ad for Diwali. I found it awesome.
In fact, change the way you think and execute in all aspects not just in ways mentioned above. Suggestions in the interest of the larger group are welcome.
One thing is for sure. If things continue as they are, it is not going to be good for anybody considering the collateral damage already caused. Further damage cannot be absorbed by anyone except the BIG ones.
Take a step back. Think. Rejuvenate.