The Indian consumer electronics and accessories market has grown considerably over the past decade. And with the wider availability of highspeed Internet connections and new technologies, the demand for mobile phone accessories will only grow further, going forward. Increasing smartphone penetration has also boosted the Indian accessories market. Currently, India is the second largest mobile phone market globally, after China.
In an interaction with EB’s Nijhum Rudra, Mandeep Arora, MD, UBON, sheds light on the various aspects of India’s electronics and accessories industry—how he expects it to evolve over the next five years and why the movement of electronics manufacturing away from China will boost the Indian economy.
EB: According to various reports, major global electronics firms are moving their manufacturing bases from China and want to commence operations in India. In what specific ways do you see this impacting our economy?
COVID-19 has impacted the global economy and has fuelled anger in world capitals, resulting in widespread anti-Chinese campaigns. China is the largest producer of the raw materials used across sectors. But the outbreak of this pandemic in Wuhan, and the Chinese government’s early lack of transparency and appropriate response, led to its spread across the world. China’s subsequent lockdown meant that countries that had not yet been affected by the disease had to still shut down manufacturing since most supply lines began in China. This has led to a major rethinking on trade ties with the country.
This situation is a blessing in disguise for India. Many companies from the US are coming to us for samples of raw materials because they don’t want to import from China anymore. The Atmanirbhar Bharat scheme could give the much-needed fillip to the country’s disrupted business operations by promoting Make in India manufacturing, encouraging the substitution of low-technology imports from other countries, particularly China, and encouraging local production at lower prices.
EB: After the devastating blow dealt by the coronavirus pandemic to the world economy, how do you see the Indian electronics industry recover and evolve, post-COVID-19, especially with regard to the business models of companies?
COVID-19 has had a substantial impact on the Indian mobile phone market already, with supply chain disruptions and lower consumer demand. Due to the global shutdown, the market initially experienced a drop in growth, But due to the work from home (WFH) policies adopted by many offices, consumer demand has begun to increase. People working/interacting via Facetime and Google meets require earphones and neckbands, which has increased the demand for these products. The coronavirus hasn’t impacted the orders, but has definitely hit the supply chain.
The post COVID-19 phase will bring new hope for the consumer electronics sector, as India will become more self-reliant. It is a great time for Made in India brands to grow. With the country’s agenda of becoming Atmanirbhar Bharat, one will soon witness the development of R&D facilities across the country. Also, India will now be seen as a dominant player for raw materials across the globe.
Also, post COVID-19, one will see huge demand for products over online platforms, while retail stores will start home delivery. After analysing the current scenario, we’ve ensured our home-delivery team is available 24×7, across India, delivering products at the customer’s doorstep.
EB: As an industry leader, what do you think are the various challenges that the consumer electronics and accessories sector face in India?
There are a lot of unbranded products in the unorganised market, which attract customers because of their low cost, as they come loaded with great features. But in the long run, these products are not reliable and do not provide a good user experience. These cheap gadgets pose a great threat to consumer privacy, and their non-adherence to standards results in poor quality. But their low prices are very tempting to the consumers, even though this results in higher costs in the long run. This has become a big challenge to the branded players that provide quality at a price.
There are three key challenges that the Indian consumer electronics and accessories sector face.
- Shrinking operating margins: Along with the manufacture of great products, comes great competition. Companies need to be more cost-efficient in order to survive, but they should not compromise on quality. The market is flooded with brands seemingly offering hi-spec products, but these are of poor quality.
- Service and warranty management: The unauthorised service centres are the biggest loophole of the consumer electronics and accessories market. The use of fake and cheap software and hardware devices by unauthorised service centres gives the industry a bad reputation, while creating unhealthy competition. At UBON, after sales service is the most important benefit we offer to our consumers. I should mention that all UBON products are covered under a one-year UBON ‘Black Warranty’. We have more than 650 service centres all over India to cater to every need of the consumer.
- Price wars: Today, neither the channel partners nor the consumers are loyal to a particular brand. As a result, most of the brands are having a hard time staying afloat in the market. Moreover, the recent inflow of low-quality products has led to a decreasing demand for expensive branded products as the price difference between the two is significant. But among the elite category, the differentiation between the prices is not that high, which creates a dilemma in the customer’s mind.
EB: What are your views on the current consumer electronics and accessories market in India? Where do you see it in the next five years?
After China, India has the largest mobile phone market globally. Yet, currently, more than 90 per cent of the mobile components are imported into India, and the segment relies heavily on shipments from China and Taiwan for handsets. Under its Make in India initiative, the government aims to encourage local manufacturing with incentives, etc. With the government’s support through its phased approach, the sector has gone through a huge transformation.
The current slogan of #BoycottChineseGoods augurs well for the future of Indian consumer electronics and accessories. This will give a major boost to Made in India companies, which will lead the country on the path towards Atmanirbhar Bharat. In the future, India will become a hub for the development of innovative gadgets and mobile accessories with a high degree of differentiation. The rapid growth in mobile phone usage has created a thriving demand for mobile accessories globally and this will lead to higher growth in this sector.
The markets will provide opportunities to those who offer quality and the latest technologies, despite challenges. Chinese products of low quality and low prices flooded the market a long time back. Now, quality is the concern for users and UBON’s prime focus is on this— quality checks and quality assurance.
EB: Tell us more about UBON’s mission and vision.
UBON started its journey as an electronics brand in 1999; however, it only got officially registered in 2004. I realised the complete absence of any branded players in the mass market mobile phone accessories segment, which has been growing as a niche segment in India. The goal of UBON as a brand is to address the needs of ‘connected consumers’ and ‘people on the go’. UBON manufactures excellent quality gadgets at an affordable price by focusing on both, the right assembly of equipment, as well as inbuilt quality.
UBON recognises every type and every category of consumer, and provides a wide range of over 700 SKUs. We vow to be the first movers in introducing large volumes of products with state-of-art technology, and to create maximum job opportunities as our commitment to society.
The mission and vision of UBON is to become the numero uno brand in the Indian market by being unique and through continuous improvement, driven by creativity, professionalism and innovation, and aided by the users, engineers and technocrats. UBON continuously strives to take the evolution of mobile accessories to higher levels.
EB: Can you highlight details of your business model and how it has changed over the years?
We are actually a very old brand, since we began operations in 1999. We have one of the oldest distribution networks in India with more than 100 channel partners across the country. You name a city, and UBON is there. So, we have a traditional distribution system.
UBON has a robust supply chain network, which enables it to distribute its products all over India. In order to make UBON available everywhere, we are putting our faith in offline channels more than online channels. Interestingly, based on our research, we found that people prefer to try and physically feel the product prior to making a buying decision. This consumer behaviour pattern led us to develop products that are eye-catching and premium as well. We have also collaborated with leading online marketplaces such as Amazon, Snapdeal and Flipkart to reach the masses. UBON has mastered the retail chain network across India and can be found in a majority of shops and showrooms in the country.
EB: There are very few branded players in the mobile phone accessories world in India. Has that helped UBON to become a leader in this area?
UBON was launched with an aim to provide high quality gadgets and mobile accessories to consumers of every sector, vertical, and level in society. With proper R&D and the right use of technology, we offer products such as Bluetooth speakers and headphones, chargers, cables, car accessories, care products, surge protectors – in all, more than 125 accessories. With no serious competition from reputed brands in the mobile phone accessories world, we are creating distinctive and well-built products that match Indian and international standards. We aim to deliver these with the latest technology, backed by good styling, with quality that lasts—all at an affordable price.
EB: What is UBON’s current market share and your target in the coming financial years? Can you name some of your channel partners?
The Indian market is so huge and diverse and we still haven’t tapped even 1 per cent of it. There is a lot to be done and we strive to do that. We are currently expanding our Indian consumer base and enhancing the consumer experience. We are planning to increase output in our Indian factory, to match the growing demand from customers. We want UBON to make a mark on the world map as a leading provider of cutting-edge mobile accessories, and we will work hard to achieve that. We are aiming at a 40 per cent share of the mobile phone accessories market in India.
Ours is one of the few brands in the country that is available pan-India, through both offline and online channels, which includes Amazon, Flipkart, etc. We are seeing huge demand from both Tier 1 and Tier 2 cities of the country, in addition to the metros.
EB: What is your roadmap for the next five years?
This industry is at a nascent stage right now. But it is going to be huge in the coming years. A lot of entrepreneurs are entering this space because it has so much to offer. Despite our strong and steadily growing consumer base, we have a long way to go. So, we are planning to diversify and expand. For instance, considering the hectic lifestyle of today’s generation, we are betting big on innovative products that can help people stay fit. We’re working on designing and developing smartwatches, fitness trackers, and virtual reality/augmented reality headsets.
Also, the future holds a lot of business potential for those who provide the right mix of the latest technology and features at the right price. I believe that modern day technologies like the Internet of Things (IoT), artificial intelligence and machine learning are indeed going to be the next big things in the industry. We are planning to widen our portfolio in the speaker and headphone category by developing voice and Internet enabled speakers and headphones. Our team at UBON’s audio labs is constantly working on and researching ways to provide the best experience to our consumers.