26 September 2017

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‘Maxx’imised Entrepreneur

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Ajjay AgarwalThe mobile industry in India witnessed a great change in recent time. The change is in user behavior and change in the user perspective towards using the mobile device. In such dynamic market, an Indian brand which stands taller than most of its global competitors is MAXX Mobiles. Ajjay Agarwal, Chairman and Managing Director, MAXX Mobiles, in an exclusive interaction with Faiz Askari, Editor of Small Enterprise India, shared his market experiences, observations, trends and tips for the aspiring entrepreneurs.

Excerpts:

Small Enterprise India: As an entrepreneur in the Mobile industry, what was your experience in setting up Maxx group?

Ajjay Agarwal: The MAXX Group was founded in 2004 with the establishment of Maxx Mobile Communications Limited (MMCL). We began by manufacturing and selling mobile phone accessories (batteries and chargers). We started the business with a 50 sq ft office and earlier this year we moved into an office that is 1000 times that area! Today, the MAXX Group has office space of 50,000 sq ft. and is one of the fastest growing handset manufacturers in India.

As we built our forte in the mobile accessories business, we recognized the larger opportunity that was shaping up in the mobility space in India. To capitalize on the growing potential of the Indian mobile handsets market, we decided to ride the wave by setting up MAXX Moblink Private Limited (MMPL). In April 2008, we began selling MAXX handsets through an already well-established distribution network in India. We invested heavily in the business while expanding MMPL’s network across India in less than a year. The risks paid off, and today the MAXX Group is a leading provider of new-age mobile phones and accessories.

SEI: What are the key challenges you faced in the initial phase of this business?

AA: The mobile handset industry has proved to be very dynamic – with the technology advancing at a rapid pace. It is essential for us to be abreast of the latest trends in the market as well as react quickly to evolving consumer demand. At the same time, it is also important to ensure that we maintain quality while keeping costs under control. The balance between meeting consumer preferences and maintaining quality while remaining price competitive is one of the biggest challenge of this business. However, as we are expanding our local manufacturing base in Haridwar to include the manufacture of lithium-ion batteries and even mobile handsets, it will help us address these concerns.

SEI: Marketing and advertising are two important aspects of today’s business especially in the mobile handset trade. Maxx Mobile is considered to be a path breaker in this. Please share your thoughts on this?

AA: We aim to develop the brand “MAXX”. We truly believe that we are an ‘Indian’ brand that wants to reach out to its consumers across the country. MAXX Mobile recently renewed M S Dhoni’s brand endorsement contract for a record deal of Rs. 29 crore for 7 years, making it one of the longest duration deals signed with any brand endorser in recent times. MAXX Mobile will leverage the popularity of M S Dhoni to reach out to the youth. As part of the deal, M S Dhoni will be associated with multiple marketing initiatives planned to promote the brand including print, television and outdoor advertising campaigns, promotional events and mass engagement programs across India.

SEI: How difficult it was to establish into an industry which have got monopoly of some limited brands?

AA: Today’s users are very discerning of both price and quality. They seek “value for money” propositions and do not want to compromise on features. In order to “sell” a handset to these astute Indian consumers, it is imperative to create a device that suits their varied needs. This high demand in India for low-cost mobile phones and the fast rate of technology evolution drives us to keep innovating at lower costs. MAXX Mobiles has an indigenous product development team that is dedicated to providing consumers with latest technologies and innovative features packaged in attractive designs. At the same time we have built a robust supply chain that helps us to better serve consumers across India.

Competition is rampant in every industry and this also acts as a motivating tool for the individual growth of companies. Healthy competition in the industry also further benefits the end consumers. In order to survive competition, it is important that a company interacts with customers and continuously engages with channel partners and work in accordance with their feedback. MAXX mantra is to make user friendly and need based handsets which are competitively priced for the customer.  To achieve this, market feedback is given due consideration while making our product and business strategy. Market information forms the base of our plan which helps us to modify the various applications, features and color of the phone. We aim to provide world class customer service for all MAXX products. Currently, MAXX has more than 500 customer touch points’ already operational across India.

SEI: What prospects do you foresee from the present set of opportunities from the market?

AA: The Indian telecom industry has seen rapid growth and the abundant possibilities still abound. We believe that there are two aspects that will lead to sustained growth in the industry viz. the innovative technologies and platforms that are continuously evolving and the increasing predominance of Indian players.

According to the data released by Telecom Regulatory Authority of India (TRAI), the number of telephone subscribers in the country reached 806.13 million at the end of January 2011 from 787.28 million in December 2010, thereby registering a growth rate of 2.39 per cent.

With the increased competition in VAS segment, the outcome has been an increase in the subscriber base for Mobile Service Providers (MSP’s). Our survival is dependent on not only the overall growth of the telecom industry but also the increase in the existence of Indian manufactured handsets. As the telecom industry grows with an increase in the subscription base, handset manufacturer’s benefit directly as customers buying a connection would also ideally buy mobile phones.

The two technology trends that have taken the Indian telecom sector by storm are 3G and Android. 3G is going to be the biggest technology break in the telecom industry. Also the share of smartphones in the overall handset market is going to increase in a big way. But this would be more skewed towards the metros and tier-1 cities. MAXX Mobiles will soon be launching 3Genabled handsets in market. Additionally, we already have few Android models in the pipeline that will soon be available in the market.

SEI: What are the new areas in which you would like to foray?

AA: As a company that is focused to meet the diverse and dynamic needs of customers across India, we are continuously looking at options that will help us to further evolve. We are exploring opportunities to foray in to the tablet space soon. However, we do not have immediate plans to enter the segment; we are still in process of research that will enable us to extend our “Value for Money” philosophy in this market segment.

SEI: What expectations do you have from next 12 months?

AA: We sold 3.6 million handsets in FY10-11, a substantial increase from our sales of 2.04 million units in the previous financial year FY09-10. We expect to continue this growth and are aiming to sell 6 million handsets in the next 12 months.

 

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