Intex targets consumer needs at base of Sri Lanka’s demographic pyramid

The ever-increasing sophistication of technology has given determined consumers constant access to cutting-edge mobile phone technology. 

However, in the years since mobile handsets found their ubiquitous place in today’s society, the manufacturing landscape has witnessed tremendous changes as greater manufacturing capacities were established in emerging Asian economies including India and China. Emerging out of these volatile conditions is Intex Technologies. 

Currently in the top three largest phone manufacturers in India, Intex has charted a meteoric rise to the top in India, and has since been working to systematically expand its presence into markets across South and East Asia, while also working to push its frontiers west-ward into the European Union and CIS nations. Having officially established their presence in the island through a groundbreaking partnership with Sri Lanka’s own Softlogic, the brand is now poised significant sales growth over the short-medium term.

Intex Technologies International Business Head Vishwas Agrawal and Softlogic Holdings PLC Executive Director Ranjan Perera sat down on the eve of their launch in Sri Lanka to discuss trends, targets and expectations for the Sri Lankan market moving forward. Following are excerpts:

 
Could you tell our readers about your brand’s history and its engagement in the Sri Lankan market? 
The Intex brand was first established in 1996 by visionary entrepreneur and philanthropist, Narendra Bansal. From our inception, Intex has always held a powerful affinity towards the creation of technology solutions that are affordable enough to be practical for the widest consumer demographics, still retaining a high degree of functionality, reliability, and durability. While the company started out as a manufacturer of IT peripherals, we have since been able to consistently diversify the spectrum of our product portfolio with the introduction of consumer electronics, consumer durables and most recently, through a flagship range of mobile phones. 

As a result, we have witnessed a meteoric growth in the company, that has taken Intex from its humble beginnings just over 21 years ago into its current position over the last financial year when the company was able to record revenue in excess of US$1billion. It is important to note that our mobile phone range has been an instrumental part of this growth. While we had started manufacturing mobile phones about eight years ago, even as recently as five years ago, it was IT peripherals that accounted for the dominant share of Intex turnover. Having used that time to fine-tune our handset portfolio, we are now witnessing tremendous demand in the mobile segment, which now accounts for a significant majority of revenue. 

The performance of our mobile phone category of products stands as a testament to our tremendous value proposition and we are extremely keen to progressively expand these products into the Sri Lankan market. While Intex has been present in the island for some time, through our vibrant partnership with the Softlogic Group, we anticipate substantially larger sales volumes across all parts of the island moving forward. 

Since ramping up your presence in Sri Lanka, what kind of growth have you seen and what is expected over the short-medium term? 
I would say that our sales in Sri Lanka have previously been at a fairly low level, especially when compared to other South Asian markets where we have a more established presence in, but through our partnership with the Softlogic Group, we are already witnessing highly encouraging trends in sales volumes. Our plan is to very rapidly consolidate on our presence here by capturing approximately eight-percent market share in the country over the next 10-12 months in terms of overall sales volumes. In particular, we are looking to develop a very strong presence in the value-for-money segment both through feature phones and to a lesser extent, through our pioneering range of smart phones.   

Right now we’re looking at numbers and numbers come from the budget phone category for any brand or country. Therefore our objective is to grow the feature phone segment to a sizeable number and we’re expecting approximately 50,000 sales per month in this segment, while in the smart phone category, we project between 10,000 and 15,000 sales per month. 

Today the Intex brand is an extremely popular choice in over 70 countries, however our core products across all of these markets has been the feature phone segment. In Sri Lanka, this would start at a price of Rs.2,000 at the lowest end of the spectrum, and approximately Rs.18,000 at the highest price point.

What kind of functionality can a user expect from your feature phone range and what kind of features get added at the higher end of the segment? 
We take a lot of care to ensure that each and every product we offer is packed with as many features and much functionality possible. Even at the lowest end of the spectrum, our products are still very feature rich, they have a camera, wireless FM, and all the other basic features that one would expect to find at that price point. Beyond that however, we also work hard to ensure that the actual build quality of our handsets is of an international standard.

Moving up our value spectrum, we have gradually introduced software and hardware configurations that ensure optimal performance, while the screen size also increases with price, hence, our smallest feature phone has a 1.8 inch screen, followed by 2.4, 2.8 and 4.0, 4.5, 5.0 and 5.5 inch screens. Our goal is to first place more emphasis on sales at the lower end of this spectrum, and as we gather momentum, we will also start to market and sell large value and volume at the higher end of the spectrum and smart phone category.

Especially when compared with India, Sri Lanka is much smaller in terms of overall market size. Given this fact, what are some of the reasons behind Intex’s decision to establish a stronger presence in the island? 
Sri Lanka is an important market for Intex, particularly in the context of our wider SAARC strategy. While we have a strong and growing presence in all regions of the globe, we are placing a particular emphasis on the South Asian region – which includes Nepal, Bangladesh, Sri Lanka and Myanmar. In many ways, we feel that this represents an extension of our Indian business into neighboring countries and we believe there is immense value for the Intex brand in consolidating our presence in this region.

In that context, we also believe that Intex is also committed towards adding unique value to our customers in different regions. While we are extremely strong in India, we can see very similar potential in the Sri Lankan market. At present we operate in countries like Vietnam, Myanmar, Qatar, Zambia, Ghana, Spain, Kazakhstan, many Middle-Eastern countries, and very shortly we will also be expanding into the Russian market.

What were some your reasons for deciding to partner with Softlogic for the distribution of Intex phones?
As I mentioned before, Intex has been doing business in Sri Lanka at a low level for some time, but until our partnership with Softlogic, we had not been able to achieve a position from which to consolidate our strength to the extent that we’ve done in other neighboring countries like Nepal and Bangladesh where we are the largest in terms of sales volumes.

Having worked in some many different countries and regions, we’re very cognizant of the vital role that a local partner can play in elevating the status of a brand at the domestic level. Consequently, once a decision was taken for us to ramp up our presence in Sri Lanka, the Softlogic Group was the immediate first choice. They have extensive experience in the mobile business and we are more than confident we will be able to work collaboratively towards drastically expanding Intex sales in Sri Lanka over the short-medium term.

From a Softlogic perspective, what does Intex add to your portfolio of brands and what were some of the reasons motivating your partnership?
With the addition of the Intex range of phones to our distribution portfolio, Softlogic now has four brands that we are distributing across the entire island. HTC is at the highest end of the handset market so those sales are focused more on value than volume, therefore our primary efforts will be towards the marketing of Samsung, Nokia and of course, Intex handsets. 

In terms of what this partnership adds to our own offerings, the most notable benefit that the Intex brand brings is that it allows us for the first time to cater to the needs of the most diverse spectrum Sri Lankan consumers by having the widest variety of handset offerings to fit into almost any price point.

 
Do you anticipate a lot of demand for budget phones in Sri Lanka and is it possible to anticipate demand based on regions or demographics?   
For such a compact place, Sri Lanka is home to immense diversity so it’s not really possible to simply categorize and project demand by region because even within individual regions and districts we see a lot of variance in consumer preferences. 

At a preliminary level the most attractive feature of these phones are their extremely affordable prices. In today’s world, having even the most basic functions of a phone can completely empower a person, that is the power of communication. So naturally our first line of customers will be those that gravitate to the attractive price points and the impressive durability and reliability that the Intex range 
can offer. 

However we have also identified several other notable trends working in favour of the budget phone range. Particularly for intensive mobile phone users, they prefer to have a low-cost back-up just in case they have issues with their phone, or in case the battery dies. By using a pre-paid SIM in combination with one of the Intex phones, a user can not only enjoy the comfort of having a fall-back option for communication, but they can also use the back-up phone as a power bank.

 
A1: On that point, one of the Intex phones that we will be marketing in Sri Lanka operates with a 4,000mAh battery, where a typical entry level feature phone uses a 800mAh battery. So it has a powerful torch and incredible battery life, even with intensive usage, but the added feature of being able to connect it to your primary phone and charge it in an emergency up to twice a day, and this is another vital feature. In addition to our normal sales, we also anticipate significant growth of demand through the trends we   just discussed.

How long has Softlogic been in the business of distributing mobile handsets and what kind of distribution network has been built up in that time? 
We have been in this business for the last 20 years and within that time, we have been highly successful in terms of driving bold expansions across the island. Today we are operating in every province in Sri Lanka through a dealer network of 1,800 dealers which are in constant contact with Softlogic’s own regional distributors which in turn is overseen by area mangers working with entire teams of sales executives and a sizeable sales force. 

Over the years we have invested heavily in fine-tuning and refining our network, particularly through investments into software and technology that enables us to monitor our distribution network and maintain constant visibility into our sales and inventory levels and these have, particularly over the recent past, enabled Softlogic to achieve an unprecedented level of agility in our sales processes. It is through the achievement of operational excellence across all facets of our business that we are able to stand as the dominant leader in mobile distribution in Sri Lanka, both in terms of volume and value.

 
How does the Sri Lankan market differ from some of the other markets that you, Intex, are active in within the SAARC region? 
In our experience, one of the most important steps to take when entering into a new market is to try and evaluate how the needs of consumers change depending on where they are located and what conditions are like in those areas. So in Nepal for example, it is mostly mountainous terrain so for those customers, a long battery life is of the utmost importance. So we market our long battery life phones very intensively in Nepal. However Nepal is also unique in that it has over 50 radio stations across the country, and FM radio is therefore a very popular medium for them. As a result, we also have to ensure that our phones in that market are packaged with a very powerful FM device. 
If we take Bangladesh as another example, the GDP per capita is one of the lowest in the world, and therefore the emphasis in that market is much more on affordable phones. In that context, the Sri Lankan market is a more mature market which is looking for a lot of functionality, but also better aesthetics. In Vietnam, it’s an even more mature market where people prefer larger screens, something which is not as much of a priority in Sri Lanka relative to Vietnam. Therefore I would say that the needs of different markets in the SAARC region show tremendous variance and customization, and adaption to individual market needs is a major pillar of our 
growth strategy. 

What are the ranges of phones that you are launching in Sri Lanka and what is the total scope of the Intex handset portfolio? 
As elaborated earlier, we put a lot of analysis into determining what phones to introduce into a given market. With our entry into Sri Lanka, Intex is launching five models of phones, three of which are feature phones and two of which are smartphones. 

Our total product portfolio is quite vast in the smartphone and feature phone category. At the moment we have about 45 models of feature phones and smartphones that are being distributed in India, and from that we select and customize our products for sale in international markets. Our general strategy has been to not launch more than about seven models at a time, but within those parameters, we aim to carry models catering to each of our core market segments. Naturally all of our phones will be sold under a full warranty and through our partnership with Softlogic, our customers can be assured that they will receive the very best in after-sales care.