realme sets sights on smart devices

Abhishek Law Kolkata | Updated on September 21, 2020

Madhav Sheth, Vice-President, realme and Chief Executive Officer, realme India and Europe

Working towards strengthening localisation strategies, says Madhav Sheth, Vice-President, realme and CEO, realme India and Europe

Madhav Sheth, Vice-President, realme and Chief Executive Officer, realme India and Europe, will spearhead the brand’s operations in Europe while continuing to head India operations.

‘realme’ is already amongst the top five mobile phone-makers here and has invested ₹300 crore in SMT lines (for smartphone) at its Greater Noida facility last year. The company is now eyeing the premium smart TV segment and adjacencies.

In an interview to BusinessLine, Sheth talks about European business plans, post-pandemic recovery and existing consumer trends in India. Excerpts:

Madhav was recently elevated as head of European operations. What are your plans there?

Expansion into Europe kicks off “realme’s” next phase of growth. We will begin with Spain, France, Germany, Poland and the Czech Republic first. And, then spread to other countries. We intend to emerge as the leading tech-lifestyle brand and among the top five smart-phone brands by 2021-end.

‘realme’ aims to sell 15-20 million smartphones in 2021, targeting the €200-250 price categories.

The IoT industry is quite proliferated there too, and ‘realme’ will launch its entire portfolio of AIOT (artificial intelligence of things) products, including smart wearables, audio accessories, smart TVs, etc.

Will Indian manufacturing facilities be leveraged for export there?

Currently, our production capabilities in India cater to demands in the country. As for PLI, this is under discussion and review.

Speaking of India, how is demand recovery and sales shaping up?

The smartphone market post-Covid is facing a U-shaped scenario. Consumers are inclined to make purchases in mid-range and budget smartphone categories, rather than premium and high-end ones. Our product roadmap is fully optimised to meet these trends.

Sales have revamped to pre-lockdown levels. We estimate that there is market demand for 10-15 million handsets from ‘realme’. To give you an indication: ‘realme 7’ sold 180,000 units on its first sale and ‘realme C11’ registered sales of 150,000 units within 2 minutes. This shows strong recovery that was witnessed over the past few months.

We managed to revamp 80 per cent of our production capabilities at the Greater Noida facility.

Is it possible to recover April sales?

The festival season will be critical to cover for the loss of volumes in Q2 (April –June period). In fact, there is pent up demand which we are trying to meet by launching new smart-phones and AIOT products.

What’s the outlook for CY 2020?

We expect to reach sales of 30 million smartphones and 8 million AIOT products by CY2020. This year, ‘realme’ plans to launch over 50 AIoT and lifestyle products.

In the coming months, we plan to launch a 55-inch ‘realme’ smart TV in the premium range. We have started TV production at our Greater Noida facility. We are on track to meet our targets by this year-end.

Any plans to bring vendors to India?

At the moment, ‘realme’ is working towards strengthening its localisation strategies. More than 60 per cent of our smartphone supplies, such as screens, batteries, internal structures, are purchased and made in India. We are also encouraging more of our suppliers and partners to open local factories here.

Have premium launches and new brands like ‘narzo’ fared?

The ‘narzo’ 10 series received tremendous success and sold 70,000 units in just 3 minutes of its first sale. ‘narzo’ 10 and 10A offered great gaming performance. We introduced extra features like a big battery with fast charging, etc. The new ‘narzo’ 20 series – which will cover different price points – will bring performance-oriented phones with strong processors.

The sub-₹10,000 and the mid-range (₹10,000-20,000) segments are main volume drivers for ‘realme’. In general, the ASP for the market is ₹15,000.

Consumer preference has veered towards more affordable products with top-notch features. While there has been more demand for the budget to mid-range products, users still prefer best in segment performance, quality, and ownership experience — something which ‘realme’ is known for among its users.

We understood that consumer need is evolving and expanded our mid-premium and premium portfolios.

How is the offline expansion plan shaping-up?

‘realme’ is boosting the distribution channels especially in Tier-4 & Tier-5 cities, to cover more than 35,000 mobile stores. During the lockdown, we strengthened our micro-distribution model. Our offline channel contributes to 40 per cent of overall sales, the rest is driven by online ones.

Published on September 21, 2020

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