Zen Mobile to focus on smartphones

Noida-based Zen Mobile is gearing up for a larger play in the smartphone segment.

The company is investing close to ₹100 crore in production and R&D, and double its marketing budget to ₹ 40 crore in FY-18.

Zen launched a number of feature phones 2010 onwards (till 2013, say market sources). The next phase saw launches in smartphones (since 2013). Right now, the company has 6-7 smartphone models.

According to Sanjay Kalirona, CEO, the company has now taken a conscious decision to focus on smartphones, besides ongoing feature phone sales.

Interestingly, Zen, which had so far targeted the bottom of the pyramid segment and Tier-2, Tier-3 markets, is also looking at urban audiences this time around.

A “favourable” response to its smartphone launches, the government’s push towards a digital economy and introduction of affordable data plans by telcos are seen as prime drivers towards its optimism.

Market sources claim that nearly 5 lakh Zen mobiles are sold every month and 90 per cent of these are feature phones.

“We have launched four models of 4G smartphones. New variants (mostly 4G) are expected to be launched in April -to-June quarter,” Kalirona told BusinessLine .

These devices would, as of now, mostly be in the entry-to-mass level range with price points varying between ₹4,000 and ₹8,000.

Faisal Kawoosa, Lead Analyst - Telecom, CMR, points out it is quite normal that predominant feature phone brands will now look at smartphones to upgrade their existing user base.

Overall feature phones are said to account for just 14 per cent of revenues but still control nearly 60 per cent of the market by volumes.

“The smartphone segment cannot be ignored anymore. And, ideally, there is some scope at the mass market end which these new brands may target,” he pointed out.

While market sources acknowledge Kalirona’s part in making Intex a successful home-grown brand, Zen’s journey may be a different ball-game altogether.

In the initial phase of Indian firms’ entry into smartphones, the market opportunity was huge and competition from global brands limited. Today, Chinese players have flooded the market and taken competition to their Indian counterparts.

Kalirona admits to it. “Chinese brands have come in. And the online segment (e-commerce) has grown. But the fundamentals have not changed. Since we introduced 4G models, we know there is an acceptance for Zen,” he adds.

Price may just not be the only USP for Zen, Kalirona maintains. “User experience” and after sales services matter; with the latter already being ramped up.

Even the distribution channel is being relaid – into a two-tier structure — to ensure that the company has greater control over inventory. From 400, the target is to increase the number of distributors to 650 by FY-18.

Presence is being ramped up in the southern and western Indian markets too.

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