Intex Technologies-Did you know intex sells smartwatches in spain? March 2018 issue

Intex Technologies-Did you know intex sells smartwatches in spain?

The story of the near-Rs.7,000 crore a year turnover recording Intex is more about just milking the domestic market. It’s about living its Make in India promise and clocking a CAGR of 100% over the last three years with exports to over 70 markets! Nepal to SAARC to ASEAN to Europe to the Middle East...Intex seems a global tech phenomenon already!

Neha Dewan | August 2016 Issue | The Dollar Business

The visitor card number which I received when I entered the premises of Intex Technologies flashed 007 on its label. And to my surprise, Narendra Bansal’s stylish white Jaguar car also sported a 007 number plate. When quizzed about it, Bansal, CMD, Intex Technologies is quick to refute any James Bond connection. “It is because of my son. He wanted 001, but since he couldn’t get that, he chose the next number that was available, 007,” he reasons.

There is an air of humility that surrounds his persona. Sitting at his plush office in Okhla, in the national capital, New Delhi, Bansal says his philosophy of life has always held him in good stead. “I always see the glass as half full,” he affirms. In fact, his sentiments echo loud enough when a large ‘Make in India’ calendar greets you the moment you step inside the Intex factory office in Noida. Perhaps, well in line with the philosophy and vision of the company which has been a front runner over the years in domestic manufacturing.

“The government identifies 32 or 34 processes, which are important for any manufacturing activity in India. And they say that if someone follows 20 of them, he/she will be called a manufacturer. And out of that, we are following 28,” he says adding “there are a lot of things that go into it, in terms of quality, testing, line balancing, software, etc. We take note of all the finer details.”

The Turnaround

The journey of Intex Technologies has indeed been a fascinating one. From a revenue of Rs.1 crore in 1996 when it was founded, the company reached a turnover of a whopping Rs.6,213 crore in FY2016. So, how did such an overwhelming turnaround happen?

“What else is business if not identifying the gap between demand and supply? All along, I have had a great knack of understanding this key fact. We had our pulse on the ideal kind of value proposition that the consumer wants, and this focus has worked out well for our brand,” Bansal reveals.

But then, it hasn’t been an easy ride for him! Known to be someone who has all along had an eye for identifying new business opportunities, in 1982, Bansal started off with an audio cassettes business, and later, moved on to the cordless phone repair business. In 1994, the floppy disk business came about, from which he picked up relevant insights about IT hardware. Bansal then started selling ethernet cards under the name of Intex in 1996. And that, as they say, was the turning point. After the first two years, business picked up and the company started seeing a y-o-y growth.

India’s feature phones market size
However, it wasn’t until 2007 when the company – which is now synonymous with mobile phones – introduced its first feature phone. Initial days came with its own set of challenges – lack of market understanding led to poor sales. Only 2,000 or 3,000 pieces were sold every month as opposed to a stock of 50,000 to 1 lakh pieces. Things only started looking up in 2013, once Intex had a better understanding of the consumer psyche. “We tweaked our strategy based on the consumers’ likes and preferences, and that was when things really started moving,” recalls Bansal. And the rest, as they say, is history.

Meanwhile, the usage of smartphones has also, predictably, increased in the country. As per International Data Corporation (IDC) data, for CY2015 smartphones shipments in India grew 28.8% (y-o-y) to 103.6 million units, positioning India as one of the fastest growing smartphone markets in Asia Pacific. Though the smartphone shipment in India fell 8.2% sequentially in January-March 2016 period (IDC data), industry insiders predict the smartphone shipments to cross 140-million mark in CY2016. The data also found that the Intex smartphone market share in India has been hovering over 9% in the four quarters of CY2015, with the primary volume driver for Intex coming from 3G based devices in sub-$100 segment. In Q1, 2016, Intex stood at third position with 9.2% market share, behind Samsung and Micromax.

What’s more? Today, the company sells a staggering 18 lakh feature phones and over 10 lakh smartphones every month! But the price points continue to be modest. The most expensive feature phone at Intex is priced at Rs.1,400. And the most expensive smartphone is priced at just Rs.13,000.


The Brand Has Reached A 25 Lakh Per Month Mobile Production

For The Masses

Has it been a conscious decision to retain such a pricing strategy? “Yes it has been a well planned out strategy. Because at this price point, no one can match the kind of features and facilities that we offer. We are a very cost conscious company. As far as margins are concerned, we all have to build in internal efficiencies, which protect the environment and create high margins. One has to control their costs. We have volume, value and bottomline!” he says in his inimitable confident style.

Bansal seems unfazed about the slew of Chinese mobile manufacturers that are setting up bases in the country. Chinese smartphone manufacturers such as Xiaomi, Gionee, Oppo, LeEco and Huawei have big plans for manufacturing in India. “Competition is always welcome. It adds more challenge and makes things better,” he says. Incidentally, the mainstay of the company all along has been its continued focus and belief in domestic manufacturing.

Currently, the company operates four manufacturing facilities - two in Jammu, and one each in Baddi and Noida, which manufacture a wide range of products. On the cards is now a fifth facility in Greater Noida, targeting an investment of Rs.1,500 crore to create, in Bansal’s words, “a world class manufacturing hub.” In 2016, the brand reached a 25 lakh per month mobile production figure in India. But it is not just about manufacturing in India. Innovation has been central to the DNA of the handset maker. For instance, the ‘Matrabhasha’ application allows users to operate the smartphones in their native languages.

The application supports upto 21 Indian languages. Besides this, Intex also has introduced a phone for the visually challenged; a phone with a 30 day battery standby designed especially for septuagenarians and octogenarians as well as water and dust resistant phones. Intex today boasts of an annual capacity of 40 million mobile handsets, 23 million mobile batteries and chargers, and around a half million LED TVs.A supervisor demonstrating the functionality of an Intex phone and its various features to his colleagues at the company’s manufacturing facility in Noida.

Big Bet On Exports!

The mobile business, of course, is what the brand has become synonymous with in the consumer mind. However, this is not the only venture of the near Rs.7,000 crore conglomerate. Over the years, the company has diversified into a range of businesses, as part of its ever growing portfolio. In 2006, Intex forayed into the consumer durables space, offering products such as DVD players, induction cookers and home theatre solutions. It further scaled up the business by entering the LED TV business in 2012.
A foray into international business began in 2013, with Nepal being the first country to market Intex mobile phones. Later, it extended to SAARC nations, and last year, the brand entered the European market with the launch of its smart watch in Spain. In less than three years, brand Intex has established its presence in the SAARC, ASEAN and Middle-East region, and a number of African nations. In all, Intex is present in nearly 70
countries today.

The company has also grown its sales and service network significantly over the years, and now has a Pan-India presence through its wide network, comprising 30 stock and sales offices and over 1,500 service touch points. Sales are routed through a distribution network comprising over 1,100 distributors and about 80,000 dealers spread across the country. Intex also has a strong retail presence in the country through its standalone brand stores – Intex Smart World. Products are also available at more than 250 dedicated counters of reputed chains of hyper markets and specialty stores across the country as well as on and e-commerce sites.

A supervisor demonstrating the functionality of an Intex phone and its various features to his colleagues at the company’s manufacturing facility in Noida.

Creating a Buzz

It’s not just mobile phones or consumer durables that have attracted the fancy of Bansal. In recent times, the company ventured into the dynamic sports management domain and bought the Rajkot IPL team for a time frame of two years. “It was a purely marketing initiative. It was my son Keshav’s idea. The brand Intex’s journey that you are seeing today has been driven by him.
He brainstormed the IPL strategy as well. Personally, I don’t follow IPL much.”

Meanwhile, the company is putting a major thrust on branding and associations post 2012, when Keshav joined the ranks. In 2013, when he was only 21 years, he signed up Bollywood actor-director Farhan Akhtar as the national brand ambassador for Intex mobiles. Later, Mahesh Babu was roped in as the ambassador for Andhra Pradesh and Telangana, and Tamil superstar Suriya for Tamil Nadu.

In fact, branding and marketing has always got key attention. For FY2016, the marketing spends were approximately Rs.300 crore, with an aggressive focus on ATL, BTL and digital marketing.

So, what lies ahead for a company which is virtually in every space? “Intex is the only Indian company which has a legacy in its domain, and it is 20 years old. We will continue to grow, but with sharp consumer insights. A consumer can make you succeed or fail. It is like a movie. It doesn’t matter what is the star cast. If there is no substance, it won’t succeed. Consumer is the king in the true sense,” signs off Bansal with a look of contentment on his face.


 India’s share in the global handset market

Currently, Intex operatesCurrently, Intex operates four manufacturing facilities based in Jammu, Baddi and Noida, which manufacture a wide range of products. On the cards is now a 5th facility in Greater Noida.

“India is a land of entrepreneurs and opportunities”


TDB: Take us through the journey of the brand. What made you start Intex Technologies in 1996?

Narendra Bansal (NB): My father was a grain merchant, something which I never wanted to get into. I wanted to do something on my own. So, before I graduated from college, I started doing small businesses that could fetch me some pocket money.
Back in 1982, audio cassettes were quite popular, but then came the cordless phones, which also became popular. So, we thought about setting up a repair shop for cordless phone. Soon the era of floppy disk business came into picture around 1994, which lasted long enough. And that was when we got an insight into the IT hardware.
All the businesses were quite lucrative at that time because of the big disequilibrium that used to exist between demand and supply. So, it was more challenging to find a supplier, than a potential customer. Today, the scenario is quite the opposite! Supply is huge, but the consumer-segment has now become too fragmented because they have a wide range of choices.
Later, Intex came about when I spotted a gap in the market. The initial challenge was people’s acceptance of the brand. Well, the fact that after sales problems exist in IT driven products, we promised a lifetime warranty and offered to replace the product, if needed. Slowly people started believing in our products and brand. And since then, we kept building our revenues, network and customer satisfaction year after year.

TDB: The IDC (International Data Corporation) market share data has continuously ranked Intex among the top five in business in India. To what do you attribute brand’s success?

NB: For me, my customers have always been the priority – of course, the product too. As long as I am able to deliver a rocking product to my consumers, the company will consistently be on a good growth path.

TDB: Over the years, the brand has diversified into consumer electronics, IT products and sports management. So, how has the company’s revenue mix changed with time?
NB: The mobile business contributes about 75% of the total revenue, followed by the consumer durables business. We sell about 40,000 of the LED pieces every month and have 6-7% market share as of now. Other businesses are much smaller, but they will also grow along the way.

TDB: How do you look at government’s ‘Make in India’ initiative? Have you planned any investment around it in the near future?

NB: The government is promoting manufacturing in India, so why won’t suppliers come? The government is quite supportive. Entrepreneurs should have two qualities to them: firstly, they should have a vision and secondly, the capacity to take risk. I, on my part, always take calculated risks and that has made me survive all the challenges and downsides.
I started domestic manufacturing 14 years back in Jammu, purely due to patriotism. In 2007, we set up another unit in Baddi in Himachal Pradesh. Well, I don’t manufacture out of compulsion or because the government wants me to, but because of my love for the country.

TDB: Intex Technologies has roped in Farhan Akhtar and Mahesh Babu, specifically for South India, as its brand ambassadors. How significant have such associations been for the brand, and what are the marketing spends made by the company?

NB: We spend about Rs.300 crore every year in brand promotion and marketing, which has helped us in enhancing the visibility and credibility of the brand.

TDB: Tell us a bit about the feature phone business of the company, and how it has progressed over the years. How important will the segment be going forward for the company?

NB: Features phones for us happened in 2007. Initially, we bled quite heavily because we could not understand the mobile business and the tricks of the trade. As opposed to a keyboard or an IT product, mobile phones are chosen personally by a consumer. On the other hand, IT products are chosen by a distributor.
We did not realise this initially, thus sales were very low. We were selling only 2,000-3000 pieces a month, even though we had 50,000 or 1 lakh pieces in stock.
However, the scenario started to change in 2013, once we understood that these products are mainly consumer oriented. So, we altered our strategy and brought everything which a consumer would like. Nobody knew that Intex has a phone, before we started advertising on TV. We also started expanding our network and gave customers the experience of an Intex phone.

TDB: What are the challenges that you face while exporting?

NB: Challenges are different in every country, be it the language, ecosystem or consumer preferences, etc. In addition, making consumers aware of Intex phone and pricing are other challenges. Well, what I have experienced in most of the countries is that people actually love to buy Indian products – they believe in India more than anything else! They find Indian products far more value driven and transparent.

TDB: Going forward, can India become a global hub for manufacturing like China? Does the present duty structure support this goal?

NB: Of course! We will beat China, hands down! If entrepreneurs in China have the support of their government, here in India, every entrepreneur is a Chinese government in itself! The kind of risk-taking and aggression that you see here is rare to find. All of us have grown, despite so many constraints, and we are continuing to grow. India is a land of entrepreneurs and opportunities, and there is no doubt that we will become a global manufacturing hub. Our infrastructure may not be at par with global standards, but we are far ahead from many others as well.
The current duty structure is pretty much in support of this goal. Earlier, the duty on finished product used to be 0%, but now, it has been increased, whereas the duty on components has decreased. This policy initiative alone has created more than 50,000 jobs in the mobile industry in the last 6-8 months.