For a company that was down and out, to become one of the best selling brands in the world in under a year—that too, selling what is rapidly becoming a commoditized product, namely the smartphone—is the kind of fairy tale story that anyone would die for. The company in question, in case you haven't guessed already, is Motorola. And the country most responsible for Motorola's success is India.
India is perhaps the most competitive market for cell phones today because of the sheer number of brands here, product segments and the assembly line of models being rolled out on a continuous basis. Indian customers don't get deals on phones vis a vis their telecom provider so the buying process is all the more exhaustive. In fact the Indian is notoriously value-driven so winning here is not a joke.
And yet Motorola has effortlessly done so, selling a staggering 1 million phones in under six months (Indians bought 44 million handsets last year at a growth rate close to 200 percent. In the last quarter of 2013, 38 percent of smartphone buyers bought phones from Samsung, 16 percent from Micromax, 10 percent from Karbonn, 5 percent from Sony and 4.7 percent from Lava). At this pace Motorola could easily become on of the top five sellers of smartphones in India by the end of the year.
So, what has made Motorola such a success in India? For one, its exclusive tie-up with India's largest e-commerce retailer Flipkart has been ultra successful. All 20,000 units of what is now its largest selling cellphone in history—the MotoG—sold out in 15 minutes after being offered. When its latest phone, the Moto E, was launched on the site on May 13th of this year at midnight, for instance, all 100,000 phones were scarfed up by mid-day the next day.
Even though India is often touted as a rising e-commerce power, no one really knew how comfortable the average Indian was in buying an expensive item online, that too an untested product which could easily develop glitches and flaws—something a cell phone buyer is normally paranoid about. Motorola’s experience has in some ways vindicated the potential of India’s e-commerce industry.
Another success factor was its cost. Selling online was ultimately a canny strategy since it was far cheaper than it would have been if it were to have distributed the handset to retail outlets across the country. It also created a buzz about itself, spinning an aura of exclusivity despite its relatively modest price offerings.
Finally, Motorola's plan to establish around a 100 walk-in service centres before the launch allayed the fears of a prospective buyer about the product—not only that that she had somewhere to go if the phone went on the blink but that the company was here to stay and truly cared about servicing the customer.
It's a hard act to match—offer a quality product, create genuine buzz and burnish your brand by providing top notch service, all at a cut rate price—but somehow Motorola has done it and Lenovo is probably thumping itself on its back in glee for buying the company from Google.
Of course, in the fast moving game of selling phones, all it takes are a series of missteps to bring this glorious run to an end. Motorola will have to take care to not get carried away by its success and stick to the kind of knitting that made it a standout success in the first place.
Yesterday's star can be tomorrow’s blackhole, as Nokia and Blackberry have found out and Motorola will do well to take a few notes from their experiences and watch competitors like Xiaomi very carefully in its rear view mirror.