12 December 2019

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Adding Colours to the Colourful Mobile Handset Market

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Sushil GuptaIn a diverse, widespread, scattered and competitive market of mobile handsets in India, Colors Mobile is functional in 7 states with a reach to 10,000 retailers across the country. Colors Mobile is targeting 25000 retailers in the existing areas by March 2012. In an exclusive interview with Shushil Gupta, Director of Colors Mobile, candidly discussed key challenges and opportunities for a new entrant in this market were discussed.

Small Enterprise India (SEI): According to you, what are the drivers and challenges of Indian mobile handset market?

Shushil Gupta: Firstly the relative market share that one company has over the other is a key driver for Indian Mobile handset industry, which can be measured by the distribution strength one enjoys over others.

Major challenge nowadays is the shrinking of margins for Indian mobile handset companies due to panic sales at low prices by some companies who are holding huge stocks for past few months and the new entrants trying to make a space for themselves on the overcrowded market.

SEI: What is the scope for new entrants in this market?

SG: In the year 2010 there were almost 20 new companies entering the market every month. Since the beginning of this year the situation has totally reversed and most of the companies have either shut their operations or changed their business models within 12-18 months of their incorporation, hence I would say it’s not the best time to enter mobile handset market when everyone is working on low margins.

SEI: What is your key USP in this market?

SG: Our key USP would be the relation that we enjoy with our channel partners in the regions where we operate. We only focus on few regions of the country so that we can give best possible support to our partners in order to grow the business and be competitive in the market.

SEI: What are the key demands of mobile users?

SG: The key focus area for Colors mobile is the rural market and hence a good battery backup is a necessity for a mobile handset. Apart from that, music quality and Video playback is something that most of the rural customers look for.

SEI: Please elaborate your market strategy/sales network?

SG: North India and North east is the main focus of the company, in which we plan to expand the number of distributors from 260 to 400 by march 2012.

SEI: Cost is playing a key role in the mobile handset market. What is your take on it?

SG: India is a most price sensitive market in the world and mobile handset market is not spared from it. I think value added services and innovative products can be a way out of the current price fight of the market.

SEI: What is the scale and size of Colors Mobile in today's context? What ambitions do you posses for your business in next one or two years?

SG: Currently we are functional in 7 states with a reach to 10,000 retailers. Our target is 25000 retailers in the existing areas by March 2012. In next fiscal year we plan to expand our operations in 5 more states provided the unbalanced tax structure is taken care by the implementation of GST.

SEI: Indian market is scattered and widespread. Do you consider it as a challenge or opportunity? Please elaborate your views?

SG: I would say its a mixture of both. Challenge in terms of reaching the very base of it and opportunity in terms of the volumes once you get to the depth of the market.


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