Chennai: Chinese cellphone maker G’Five International Ltd is fast eating into the market share of leading mobile handset sellers such as Nokia and Samsung in India and overseas.
Arshit Pathak, managing director of the Hong Kong-based company’s India arm, spoke to Mint in a phone interview about his plans to unseat Nokia from its top spot in India.
How did you grow to be a big brand in India?
Shenzhen-based Kingtech Electronics started manufacturing phones for various companies in 2003 and launched the G’Five brand around 2007. It sold G’Five via its trading company in Hong Kong to distributors who brought the brand to India. It was a good product at a competitive price. There was no marketing, no service, no warranty, nothing. As a brand we love our anonymity and, therefore, no one noticed us until we were doing over 1 million units a month last year, which was good.
Cost advantage: G’Five’s Arshit Pathak.
You continue to do business like this?
No. Last year we repositioned ourselves. We set up an India office in 2010, and in January 2011, we launched a product with a projector, and we plan to introduce touch screen and Qwerty keypad phones. Today we have 500 service centres that will double to 1,000 by the end of this year.
Why are the market leaders in India hurting?
Our lead-time for coming up with products is very short. It only takes 45 days from ideation to delivery of a new product. Any European or American company just cannot compete with us. They are very high-cost and margin-driven. We are market-share driven.
How did G’Five take share from Nokia?
Two years ago, customers asked handset sellers for Nokia phones and the trade didn’t have to push the brand. But when it came to dual-SIM (subscriber identity module), Nokia believed that it killed the prospect of selling another phone.
So wholesalers and retailers pushed other branded dual-SIM products, which were a boon in the absence of number portability. We realized that this is one space that Nokia is unlikely to come, and brought out several variants.
How do you manage such a wide range of models and variants, and how can you keep costs low?
We are the largest exporter of handsets out of China. We have a manufacturing capability of 5 million handsets a month. Economies of scale are in our favour. We have more than 300 models in our range. Our capability to launch is two models a week.
Why would you want to launch so many models every week?
Technology changes very fast and component prices also reduce. Every product becomes obsolete in months and the process to manufacture it becomes expensive. We keep launching new products and models to take advantage of the dropping prices of the components, and also offer a product that is contemporary and cost effective.
What has your performance been like in India?
We sell roughly 2 million handsets a month on an average. Last year, our average was 1.7 million monthly units. This year, since January, we are logging 2.3 million cellphones in India, which will help us touch $1.5 billion (rs6,720 crore today) in 2011 India sales, up from $1 billion last year. By 2014, we want to be the No. 1 player in India.
Is the tablet (small touch screen mobile computers) a big market for you?
If you look at the profile of people using iPad today, it is an additional computing device. But there’s a huge population of old people, students, etc. who still go to the cybercafé to check email. We are positioning our tablet— priced between Rs7,000 and Rs.10,000—as the first computing device.
Some of your rivals are still dismissive of smaller brands. Your response?
I think it is dangerous if consumers are dismissive of us, not the competition.