Alcatel has recently entered into Pakistani mobile phone market which is unbalanced owing to smuggled phones and excessive taxes. Although it has reached a point of saturation for some players, however, it offers an enormous potential at the same time.
On a more positive side, the mobile broadband is getting popular in Pakistan; and, the market is getting more lucrative for smartphone sellers who are designing well-optimized devices for best user experience. Over 28 million people are using 3G and 4G services in Pakistan, and this ever-swelling figure demands more committed smartphone sellers to join the club.
Alcatel is the new entry in the already price sensitive Pakistani mobile phone market. Earlier in May, it announced i2 Pakistan as its official distributor and within a month, its stock has hit the shelves of 170 dealers and wholesalers across the country which is expected to reach further to thousands of retail outlets in the coming days, a company official told in a recently held media gathering.
With nearly 75,000 employees world over, Alcatel boasts a product lineup that ranges from feature phones to 110 inches big LCDs.
According to IDC, Alcatel’s global mobile phone business presence is the 5th largest regarding mobile shipments, and the brand scores number 5th position in North America, 2nd in Latin America, number 1 in Russia and 4th in Middle East Africa region.
As per official statistics revealed, it has 23 research and development facilities in various parts of the world, and it is manufacturing its products in 21 factories. The company also takes credit for managing world’s largest smartphone factory in terms of the number of units it produces.
In 2014, Alcatel’s total revenue stood at $ 16 billion including the profit of $ 688 million; and, in 2015, it has reported a 38% growth in its smartphones business.
With this impressive statistics, it has just started rolling out its plan of activities amid a situation when the budgetary announcement is expected to bring an increase in taxes on mobile phones. The situation also seems very challenging for any new player, particularly when brands like Oppo, iNew, and Rivo have tested the waters without much luck.
Handset Industry analysts are of the view that, despite 3G and 4G, there doesn’t seem a significant upward trend in the overall number of mobile phone sold every month rather, it is the shift from feature phones to smartphones which has doubled the revenues for the sellers.
An Insight To The Strategy of Alcatel
Nauman Durrani, General Manager, Middle East region for Alcatel convincingly states that the company has studied the market very well, and there is a good room for quality products in Pakistan. Besides, We have planned different consumer value proposition for various smartphones.
While exclusively talking to MORE about principal components for brand success, Durrani said, “There are three pillars of handset industry. The most important one is the product quality. Second is product range for which we start at PKR 1,650 and go as high as PKR 50,000 for more advanced smartphones; and, the third one is the distribution and retail footprint.”
Durrani is happy to have i2 Pakistan as their distribution partner as he finds them a better choice for product availability, across the country.
Like any other country, retailers in Pakistan get mobilized through various incentives and different brands have reportedly faced issues owing to less than desired offerings. Huawei, being a newer player than already established Samsung, offers more commissions and hidden benefits for better sales.
“One should never try and change the incentive norms in the market when you are launching, especially. For us, the important thing is that consumer needs to ask for our devices. We will have our market strategies and incentive plan as well. We want to make sure that everybody is happy from the distributor to the wholesaler to the retailer and in the end, the benefit should be transferred to the end consumer. We have planned everything”, mentioned Durrani.
Pakistan is a hugely advertised and celebrity obsessed market, particularly for mobile phones. No doubt QMobile takes the lead which was also replicated by Samsung with the addition of Fawad Khan and Ali Zafar and it undoubtedly reflected on their sales.
However, Durrani thinks that the state of existing advertisement is what consumer is fed up of — because, telling customers about specs, price through a celebrity is no more working.
“Pakistan is a very ATL driven market; there are lots of TV ads which are mainly about product specs, price, and celebrity.”
“If we do the same thing it becomes more of a copy paste. We need to look that what kind of innovation we are bringing to the consumer. And certainly we will advertise as well”, Nauman Durrani continued.
He is of the opinion that customer knows about numbers of likes Octacore or 1.4 Ghz, but he doesn’t understand how to translate it. A smartphone today is more of an educational and entertainment gadget, and it shouldn’t be sold by just advertising the key features.
For doing something different, Alcatel plans to distribute freebies with its phones. Recently, it offered free JBL headphones of worth PKR 8000 with IDOL3 as a part of an incentive plan for the consumer. Similarly, we were told that even lower-end feature phones will have additional accessories in the sales pack.
Nauman Durrani wishes to grab the 3rd position in Pakistani handset market in 18 months. He is confident that the quality of product at an affordable price will do the magic.
“In about 18 months time, we should be among top 3 brands in Pakistan. One of the biggest advantages Alcatel has that we have our own factories, and it gives us a lot of cost advantage over various other brands that do not manufacture. We have placed our product at very competitive pricing. It’s going to be a mix of price and consumer value proposition.”, Durrani explained.
On the issue of taxes, Nauman Durrani clearly stated that taxes shouldn’t be a problem as far as the government provides a level playing field for everyone.
“Tax should be borne by the consumer but it has to be regularized, and there should be no door opened for smuggled products. The government should ensure that everyone pays taxes on their products. It needs to be level playing ground for everyone,” Durrani recommended.
Alcatel has also announced its partnership with market leader Mobilink for selling smartphones with various data bundles.
Other than mobile phones, the company has also introduced Windows and Android based tablets, MiFi devices, Power banks, Bluetooth and in few weeks a GPS based kids watch for keeping track of children is also a part of the plan.
As communicated, company’s handsets will mainly fall into three broad categories Pixi, POP, and IDOL.