PHICOMM CEO Zheng Min recently met with the Financial Express to talk about the company and its vision for India. He emphasised on building a local ecosystem – from a dedicated research and development unit to manufacturing facilities to data centres.
The interaction has been reproduced below.
Good companies never start late
With India being the second largest mobile phone market globally, a number of players have entered the country to launch their products. In the process, it has become one crowded and tough market to operate in. Phicomm is the latest Chinese brand to foray into the Indian market.
“India is one of the most important markets for Phicomm and we are planning to set up our own R&D unit, manufacturing facility and data centre here—thereby building a local ecosystem,” says Zheng Min, CEO of Phicomm.
He joined Phicomm in 2013 as the CEO and is responsible for growing the product R&D, increasing business units and rapidly expanding the global sales.
“Specific to India, our main aim is to make smartphones accessible to all mobile users and provide them access to everything that the mobile Internet has to offer,” he tells Sudhir Chowdhary in a recent interaction.
The Indian smartphone market is crowded with many players. Do you think you have arrived late in the market?
Actually good companies never start late. Let me tell you something about our company. Phicomm has a unique ecosystem and we have our in-house R&D, in-house manufacturing, in-house design and our own data centre that gives us an advantage over any competition. We started our journey in 2009, and in only 6 years we have achieved an average annual growth rate of over 200%. We have 5 business units—Mobile, SOHO, ENT, ICT and Cloud. And we do everything—from research and design to manufacturing. What makes us unique is that we create a strategic ecosystem which can cater to the needs of each market.
India is one of the most important markets for Phicomm and we are planning to set up our own R&D unit, manufacturing unit and data centre here—thereby building a local ecosystem. By doing this, we intend to bring to you a more user-friendly, comfortable, and cost-effective smartphone. Close to 55% of our employees work in R&D and technical support.
We already have our domestic R&D bases in Shanghai, Beijing, Nanjing and Shenzhen and overseas, we are present in Munich and San Francisco. India will be our next target. Our vision is to build Phicomm into a superior equipment and service provider in the information and communications sector. Our main aim is to make smartphones accessible to all mobile users and providing them access to everything that the mobile Internet has to offer.
What is your go-to-market strategy for the India market?
We have a huge investment planned for the Indian market. For the next three years, we have plans to invest $100 million to cover the Indian market activities including building the local team, local branding, marketing and local R&D. In a bid to strengthen our presence in India, Phicomm has introduced around 107 service centres across more than 100 cities in India after making impressive sales for Phicomm Passion 660 smartphone in the first two weeks.
What kind of market share are you looking at by the end of 2015?
We are looking at 5% market share in India in the next five years. Today in China actually we have a combination of different products including the mobile and the SOHO — home devices. In SOHO, we stand in number 2 or 3 in China.
Why online? Why not open a new retail store?
First step is online, next step we are considering are offline channels. Our consumers are mostly young people who are very e-commerce friendly and mainly we are targeting the young generation for our Passion 660 smartphone. These young people are excited about e-commerce activities so it could be the right way to push the online customer. It should around 6 to 7 months for us to get into offline from online medium.
What was the last year revenue? How are you looking at India’s revenue within 5 years?
Phicomm had more than $1.5 billion revenue globally last year. In India, we are looking at a figure of $1 billion in the next five years. And because our channel for sale is mainly online, we are focusing on all marketing efforts online itself. When we decide to go offline, we may also think about celebrity associations.
Government is aggressively trying to promote local manufacturing in India. Any plans to set up a local assembly unit in the near term?
We want to set up a local ecosystem in India. We want to build our local R&D team, manufacturing team and marketing and sales team. India has developed a lot so either we set up a manufacturing unit on our own here or we take help from local partners.
Are you in talks with any manufacturing partner right now?
We are in talks with some local partners but we are yet to decide if we want to go ahead with manufacturing with the help of a local partner or do it completely in-house. It is early stages so it depends on the supply chain maturity and if we can find the right partner. But it will happen sooner than later. We could begin with semi knocked down (SKD) or completely knocked down (CKD) as a first step and go on to testing, packaging and assembling, basically move forward step by step. We may also cater to other markets such as Africa through the manufacturing unit in India.