Is it still worth crying over spilled MILK (Micromax, Intex, Lava, Karbonn)?

Since 2015, the share of local mobile brands has been decreasing in India, after the influx of Chinese manufacturers. Indian handset players compete mainly in the feature phone category, and entry-level and mid-level smartphone segments, leaving out the flagship high-end segment to the Korean, American and Chinese giants.

Over time, various international brands have entered the feature phone and budget smartphone space, impacting the sales of their Indian counterparts considerably. It was not the likes of Xiaomi that did most of the damage, rather those of Vivo and Oppo turned out to be the major disrupters. Not only did they aggressively advertise on TV, they also spent insane amounts in marketing and painting the town red with their blue and green logos, respectively.

Current scenario: Of the major Indian handset players popularly referred to as MILK, Micromax (4%), and Lava, (3%) still have some presence in the smartphone market, while Karbonn (nil), and Intex (1%) have a minimal share, according to estimates. After Gionee got acquired by Karbonn in 2018, the merged entity has been losing shares and there are reports that it may eventually shut down. Intex perhaps has only one or two models of feature phones still in the market, that too of residual stock, and also may exit handsets business. There are news of these brands exploring other avenues in devices market.

Market analysts are almost certain that the chances of coming back are bleak, but however, few recent activities adopted by Lava and Micromax have started creating some breathing space again for the local brands.

Where have they gone wrong? The major reason that can be identified for Indian brands' failure is lack of aggression and investments, and in parallel, there was no realistic attempt to recapture mind or market share in any specific price segment. Others may also find additional reasons in form of : 1) Focus on 2G and 3G phones when country was adopting 4G enabled devices; 2) Weak online presences with focus majorly on filling up offline retail shelves. 3) Inconsistent marketing plans with minimum aggression shown towards any specific medium, or event, or TG.

Does it mean end of roads for the local brands?

Well, there are still some opportunities to explore.

Specify price segment: Till date the consumers do not have many options in the $45-50 (Rs.3000-4000) price point, and in fact, better bet will be to increase focus on the under-$100 (around Rs 7,000) smartphone segment and on feature phones, which still offer huge volumes in India. The growth will come from those 450 million feature phone users who have to switch to a smartphone in next 2-3 years. Jio is trying to do that with its feature phones, but the struggling brands should show more commitment to leverage the opportunity area of $40-$60 segment.

Be the chosen brand of mass consumers: We have been reading articles over last 1-2 years on these local brands implementing innovations in design and features within cheap price ranges, few challenging counterparts with discounts and services, and majorly promoting themselves via BTL activities. However, clearly these do not seem to be bringing a sustainable mass appeal from the budget segment. They are even lacking in terms of consumer mind share or brand recall because the lower to mid-range consumers are not loyal to their brands and will switch to any affordable proposition that is being talked about for its quality and features. Hence, they will need to adopt complementary actions of creating 'word of mouth', endorsed via celebrity or cast via mass mediums.

A proven approach of triggering immediate spikes of consumer interests for struggling brands is by delivering brand communication/ messages through popular TV or digital properties. Although digital content consumption is rising rapidly in Tier 2 to 4 areas, majority of viewers will however be trying and testing different subscriptions or choosing contents for the first time. Hence, TV should still be the preferred ATL medium for marketers when they are targeting rural areas. Selecting one or two seasons of a cricket/ Kabaddi league, or mass GEC shows, and going big in the scale of a title or associate sponsorship if have sufficient budget, or thoughtful integrated marketing campaigns in case of budget constraints, have maximum chances of improving brand imagery and spontaneous awareness.