Lava aims to 'decolonise' the smartphone market from Chinese brands: Interim MD

sunil-raina

Domestic handset maker Lava International said that it aims to 'decolonise' the smartphone market from Chinese brands with its aggressive smartphone strategy, through which it aims to corner around 25 percent share in the next four to five years in the under-Rs 30,000 price segment.

“Indian brands had a 31 percent market share in 2014, but fell to below two percent in 2023. After 2014, Chinese brands entered the Indian market, it was like the East India Company coming to India and capturing everything. Now, all shops are flooded with Chinese brands, we want to decolonise the smartphone industry from the Chinese,” Sunil Raina, Interim Managing Director at Lava International, told Moneycontrol in an interaction.

Lava intends to double its smartphone sales in the next fiscal year, riding on the 4G to 5G transition wave. Its smartphone sales have almost trebled year-on-year in the current fiscal.

“The smartphone has been a positive story for us. In four or five years, we want a 25 percent share with a significant play under Rs 30,000. ASPs (average selling price) are increasing and will explore options in the Rs 30,000 plus segment. We are prepared for higher average selling price products.”

Raina said Lava is ready to take on Chinese companies in the sub-Rs 30,000 price segment, with respect to price, product quality, hardware specifications and time to market. “Till the Rs 30,000 price point, we will not be late…we could instead be ahead of many Chinese brands in launching the latest phones since we have a direct connection with supply chain players, who work with us on a forecast basis,” he said.

Lava was the fastest-growing brand in 2023 (213 percent) and the October-December quarter of the calendar year 2023 (187 percent) in the Rs 10,000-Rs 20,000 category. According to the latest Counterpoint Data, Lava was also the second fastest-growing brand with 105 percent (overall) in the October-December quarter of 2023.

“We understood the 5G wave early because we had 3G to 4G learnings and didn't want to repeat the same mistake,” Raina said.

Lava cornered a 24 per cent share in the feature phone market in the April-December 2023 period.

Indian handset brands like Lava must have a fair market share of around 25 percent, he said. “We have shown the market that we are the only Indian brand that will become bigger in the handset space. We are the only active company and are now getting the ecosystem's support. While we need competition at both local and global levels, Indian brands need to get their fair share”.

The government is also actively ensuring that Indian brands grow and there is positivity around Indian brands, he said. “We are very competitive on a price-to-spec ratio. We are matching the Chinese in every aspect of our products. We have a distribution advantage as well. We have also worked on service; our fault rate is the lowest”.

Lava plans to invest Rs 500 crore in research and development (R&D) and marketing. Raina said that the company is also looking to raise 50-60 percent of the total planned investment. “We are finding sources of investment and would be able to secure funding in the next fiscal. We are in talks with Indian and multinational firms for the same.”

Lava is the only domestic handset brand with full-fledged R&D work in India. It recently appointed Rishi Bhatnagar to lead research & development (R&D), designs, and innovation.

“We want to invest more on the software front. We want to give a clear Android experience along with regular software updates, which are promised quarterly. We have also increased manpower in design by 25 percent in the current fiscal year,” Raina said, adding that Lava has doubled its marketing spending this fiscal year.

Lava clocked around Rs 6,000 crore in revenue in the last fiscal, including its international business. “While the international business is stable, we expect the Indian revenue to grow 50-60 percent in the fiscal, primarily driven by smartphones,” he said.

To expand its international business, Lava International in 2021 acquired the Latin American device brand China Bird Centro America S.A, which operates under the B Mobile brand to sell features and smartphones in the Latin American market.

“The Latin American brand has started using the Lava brand. They were doing their procurement but are now shifting manufacturing to India,” Raina said.

The executive added that the company will expand into African countries in the coming months and may explore entering the US and European markets if its smartphone business grows further. Lava is already selling its phones in Nepal, Bangladesh, Sri Lanka, the UAE and Qatar.

Lava, through its subsidiary SOJO Manufacturing Services (AP) Private Limited, has also begun talks with domestic and multinational companies for local manufacturing of tablets and laptops.

SOJO recently received approval for IT hardware under the production-linked incentive (PLI) scheme. “...we have started approaching relevant companies in the tablet and laptop segments. We are capable of making both these products. The target under the PLI is easily achievable since our base is zero,” Raina said.

Lava has a full licence from Motorola to design, manufacture, sell, and distribute feature phones. It also makes Nokia-branded smartphones for HMD Global.

The company is also betting on the wearable space and will soon launch its locally designed and manufactured smartwatch. It already sells audio products like neckbands and True Wireless (TWS) earphones.