Lava to invest ₹800 crore to boost smartphone biz
1 min read . Updated: 15 Jan 2021, 11:20 PM IST
PremiumWith the aim of capturing 5% of the smartphone market in 2021, Lava has launched five new models
After Micromax, homegrown phone company Lava is trying to make a comeback in the domestic smartphone market with five new models following government schemes incentivizing electronic manufacturing in India.
Lava launched five smartphone models—Z1, Z2, Z4, and Z6—for ₹5,499 to ₹9,999, while Lava MyZ, a customizable phone will be priced at ₹6,999-10,500.
The company will infuse ₹800 crore in 2021 to boost its smartphone business, with the bulk of the investment going into research and development, manufacturing and expanding its international presence. However, Lava did not reveal how it plans to raise the capital to back its plans. Mint had reported that it was preparing to go public after the Union budget. According to people in the know, Lava is expecting to raise ₹1,400 crore through the IPO.
It will also hire across verticals. “We will double our design capacity in terms of the number of people. In manufacturing we are expecting 30% addition," said Sunil Raina, president and business head, Lava International. It has 3,000-4,000 employees in manufacturing and around 100 people in design.
Chinese brands account for a lion’s share of India’s smartphone market. After the backlash against Chinese brands in 2020, the combined market share of Chinese firms fell by up to 9% in Q2 2020. However, several of those brands have bounced back since then. Barring Samsung, none of the non-Chinese brands are in the top five.
Lava is aiming to capture 5% of the smartphone market in 2021 and is counting on its new customizable phones and upgrade-after-purchase schemes to differentiate products.
“If at any point in time, within the first year, you feel that you need an upgrade on RAM or ROM, you can come to us and we will get them upgraded at incremental cost," said Raina. “If you look at the India market, there are roughly 400 million people who still use feature phones. When they move up to a smartphone they may not be having the money to buy the best phone," he added.
Amid growing interest in 5G services and compatible smartphones, Lava will launch 5G phones too. According to Raina, more than one-third of their portfolio will be 5G-ready by the end of 2021.
