It took time to come to India. But now that it’s here, the firm is giving nightmares to leading brands in the Indian handset market. What has made G’Five click? Critically, will it become the #2 soon?
Clearly, G’Five is not an underdog anymore. It is not just another name in the crowd, despite the fact that there are 35 manufacturing vendors in the market today (a rise in count of 600% since January 2008). G’Five has very scientifically chosen the right target segments and product models to maximise its sales in India. In recent quarters, there has been a phenomenal rise in the sales of dual and triple-SIM cards slot phones. During Q2, 2010 alone, this category accounted for 38.5% of the total Indian mobile handset shipments – a phenomenal rise from under 1% in the same quarter a year ago (as per IDC; Nokia opposes this finding). To tap this opportunity, all the handset models that G’Five has launched in India over the last three quarters – T560, U800, F2, G9000i, et al – have all been a multi-SIM cards slot phones. The company claims that it has over 300 models in the Indian marketplace, and that it comes out with two new handsets every week.
G’Five also offers prices at points which are precisely as per the doctor’s prescription. Targeting consumers in the lower-middle segment and the bottom of the pyramid, G’Five has built a portfolio of products, which aim to provide a plethora of features, with acceptable quality and at very affordable prices (between Rs.1,300 to Rs.5,000) – an admixture that attracts both the neurologically complex urban dwellers and the simple rural populace. “The demand is so high in this sensitive segment that there is still a lot of untapped potential that G’Five can bet its future on,” explains Pankaj Karna, MD, Maple Advisors. Even IDC feels that G’Five’s dual strategy of tapping both the rural and urban markets with such offerings is what’s working the numbers. Adds Anirban Banerjee, Associate Vice-President – Research, IDC India, to B&E, “Based on our interactions with market participants, the large metros have already achieved a high mobile tele-density. Upcountry and rural markets continue to show a healthy appetite for mobile handsets. This trend should continue over the next 2-3 years...”
How a test drive turned into an insatiable hunger for covering countless miles for G’Five, is a question that would squeeze out boredom out of even the most lackadaisical of all strategists. And what makes this book an interesting read is the chapter that explains how G’Five understood the meaning of controlling costs, right from day #1. There are stark differences in quality – of both hardware and software – between G’Five’s handsets and that of the Nokias and the Samsungs. They show. There is also a difference in the manner in which G’Five makes profits. This too is not hidden to the naked eye. The company earns 99% of its revenues from exports out of China, and as such has not set up company-owned branches in any of the foreign markets where it sells, whether it be South-East Asia, the Middle-East, Africa or even South America. Its only manufacturing plant is in Shenzhen, and its lone operation centre is in Hong Kong. In short, the company gives its products to the distributors. This strategy helps to keep a check on operational and fixed costs, thereby allowing the company to enjoy high margins despite keeping the prices of its products at low levels.
A couple of decades back, a claim by any economist that China would overtake Japan as the 2nd-largest economy, would have earned him nothing but humiliating jeers. But China did prove its mettle. Today, you would not dare bet on a roulette on G’Five’s future success probability – at least, we wouldn’t!
G’Five also offers prices at points which are precisely as per the doctor’s prescription. Targeting consumers in the lower-middle segment and the bottom of the pyramid, G’Five has built a portfolio of products, which aim to provide a plethora of features, with acceptable quality and at very affordable prices (between Rs.1,300 to Rs.5,000) – an admixture that attracts both the neurologically complex urban dwellers and the simple rural populace. “The demand is so high in this sensitive segment that there is still a lot of untapped potential that G’Five can bet its future on,” explains Pankaj Karna, MD, Maple Advisors. Even IDC feels that G’Five’s dual strategy of tapping both the rural and urban markets with such offerings is what’s working the numbers. Adds Anirban Banerjee, Associate Vice-President – Research, IDC India, to B&E, “Based on our interactions with market participants, the large metros have already achieved a high mobile tele-density. Upcountry and rural markets continue to show a healthy appetite for mobile handsets. This trend should continue over the next 2-3 years...”
How a test drive turned into an insatiable hunger for covering countless miles for G’Five, is a question that would squeeze out boredom out of even the most lackadaisical of all strategists. And what makes this book an interesting read is the chapter that explains how G’Five understood the meaning of controlling costs, right from day #1. There are stark differences in quality – of both hardware and software – between G’Five’s handsets and that of the Nokias and the Samsungs. They show. There is also a difference in the manner in which G’Five makes profits. This too is not hidden to the naked eye. The company earns 99% of its revenues from exports out of China, and as such has not set up company-owned branches in any of the foreign markets where it sells, whether it be South-East Asia, the Middle-East, Africa or even South America. Its only manufacturing plant is in Shenzhen, and its lone operation centre is in Hong Kong. In short, the company gives its products to the distributors. This strategy helps to keep a check on operational and fixed costs, thereby allowing the company to enjoy high margins despite keeping the prices of its products at low levels.
A couple of decades back, a claim by any economist that China would overtake Japan as the 2nd-largest economy, would have earned him nothing but humiliating jeers. But China did prove its mettle. Today, you would not dare bet on a roulette on G’Five’s future success probability – at least, we wouldn’t!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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