Gionee, amongst the earliest Chinese brands to enter India, has had a successful journey so far and is optimistic about future growth. Arvind Vohra, country chief executive officer and managing director, Gionee India, talks about the company’s focus areas and growth strategy…
How has the entry of Chinese handsets changed the Indian smartphone landscape? How has Gionee’s journey been in India so far?
Gionee is one of the first few Chinese brands to have entered India, and has been successful in clearing the Chinese stigma and changing the consumer perception. Today, Chinese brands have much greater acceptance in India, a trend started by us. We are now geared up to compete with other brands. Over the past few months, Chinese brands have created a dent in the market shares of Indian and multinational brands to become a preferred choice for consumers. This can be attributed to the products and services we offer. Chinese brands have evolved with changing consumer tastes. Gionee was quick to understand that a smartphone represents its user’s taste, personality and even identity, and therefore adopted a new approach with a focus on design. Apart from introducing a slew of handsets, Gionee has been focusing on enhancing the customer experience and ramping up its customer service centres and retail outlets.
What are the key growth opportunities in the Indian market? How has the company leveraged these?
Gionee has carved a niche for itself in the Indian market but in order to expand its reach, we are partnering with multi-retail outlets including Spice, the Mobile Store, Mobiliti World, Jumbo Electronics, Croma and Planet M. This move will help the brand gain a pan-Indian presence, boost its sales in India and achieve a growth of 10 per cent. Gionee handsets are available at more than 1,000 stores, where we aim to sell over 35,000 additional devices every month. The company has been rapidly expanding its footprint in India by opening brand stores. It aims to open 250 brand stores over the next one year.
What has been the response to Gionee’s products in India? What are your current sales levels and future plans?
Gionee India’s sales per month have crossed half a million units and the number is expected to reach 1 million by the end of the year. The company is targeting a turnover of Rs 80 billion in the current fiscal. In order to achieve this, it will invest Rs 6 billion in marketing and branding activities this year and also expand its retail network.
What is your view on the online versus offline modes of handset retail? What is Gionee’s strategy in this regard? What is your retail footprint in the country?
To us, online is another sales channel and we believe we should be a part of it without any pricing disparities. Online availability is often convenient and we must provide every convenience to our customers. We sell our products through 40,000 outlets and 12,000 shop-in-shops. We enable the customer to get a closer look at our products and technologies. We believe this will add to our loyal customer base and boost our sales numbers.
What are your views on the Make in India initiative? What are Gionee’s manufacturing plans for India?
We are committed to India and deeply inspired by the philosophy of Make in India. Currently, about 60 per cent of Gionee’s devices sold in India are manufactured locally at facilities run by Foxconn (Tamil Nadu) and Dixon (Noida). Gionee is planning to set up an end-to-end manufacturing unit in Faridabad and will invest Rs 5 billion in this plant. The facility will be spread across 50 acres, have a capacity of 30 million units, and will be operational in about two years. It will tap into the demand in India and serve as an export hub for markets such as Africa and South East Asia.
What is your outlook for the Indian smartphone industry?
The Indian mobile industry is growing at a rapid pace and will continue to drive growth in the telecom market. Smartphone sales continue to show resilience and grow substantially. According to India Smartphone Market Outlook, the market is expected to grow at a compound annual growth rate of 10.95 per cent till 2018, driven by strong data uptake on hand-held devices. Gionee’s market share in India is currently around 5 per cent and we are targeting 7-8 per cent this fiscal. To achieve this, the company will focus primarily on its retail presence.
In 2014-15, Gionee generated revenues of Rs 32 billion. On an average, 75 per cent of our sales come from smartphones and we are looking at doubling our sales to 8 million units this year. We are also targeting a turnover of Rs 80 billion. In order to achieve this, we plan to invest Rs 6 billion in marketing, which includes Rs 2 billion for rebranding.