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Nokia owns India

29/3/09

When you’ve visited a country once you are an expert. You come away with lots of thoughts on what the place is like and are happy to give an opinion. Go back a few times and you soon learn that you know less the more you return. This is something I was taught about Japan when I was in my gap year and doing a world tour with my friend Leona. She was the practical one who always knew where we’d be sleeping that night. I was the adventurous one.

What is true of Japan is true of many countries but none more so than India. This makes for dangerous territory because I have only been to India once and I know how flawed that makes my “expertise”.

I’ve been reading The Elephant, The Tiger And The Cell Phone: India: The Emerging 21st Century Power by Shashi Tharoor Cat holding The Elephant, The Tiger And The Cell Phone: India: The Emerging 21st Century Power by Shashi Tharoorwhich gives some insight into just how complicated India is. It’s multi-layered by caste, region, religion, colour, language, literacy, income, cricket loyalty and a huge number of other parameters. This it  conveys a sense of just how fantastically complicated  the place is.

You would have thought that this would have made India ripe for multiple mobile phone manufacturers to each carve their own slice of the market, but it’s not the case. The colloquial term for a mobile phone is a “Nokia”. As in “Call me on my Nokia”, just as Xerox or Google have become verbs the brand name has passed into the vernacular. Nokia is the biggest brand in the country. Not just the biggest phone brand but the biggest brand for anything; bigger than McDonalds, Coca-Cola or Nike.

The dealers are fantastically knowledgeable and can tell you whatever you want to know over a whole gamut of phones from strange Chinese manufacturers and India’s own Spice Mobile.

But what they sell is Nokias.

This is mostly down to supply chain. Phones are sold on a tiny margin. A dealer will make more from pirating a ring tone than from selling a phone, so stock is minimal. Only Nokia has the credit terms and distribution network to allow a dealer to sell a phone before he pays for it. This means daily deliveries and the place is big so it’s a massive infrastructure investment for anyone who wants to compete. Rivals who go through distributors might want quick payment but they can only deliver once a week or fortnight. Stock level are so tight a dealer might open for long enough to sell what he has and then shut the shop until the next delivery. Especially if there is a Test Match on.

This then feeds into other aspects. The availability of spares matters hugely. Rural India repairs things that the west, and metropolitan India would throw away. Again distribution is crucial, consumers won’t buy things they can’t get the spares for. Second-hand values are important, and if you can’t get the parts it’s worth nothing like as much as a Nokia where everything is available.  Nokia’s great platforming is a strength here.
In areas with poor literacy there is a reliance on peer teaching. A phone is a major purchase and people will buy what their friends and relatives know so that they can be shown how to use the phone.

Against this backdrop Nokia has made the phones culturally relevant. They manufacture locally which gives patriotic support, they include Hindi calendars and cricket games, but most of all they understand the people which is what led to the landmark decision to include a torch. This sounds simple and unimportant but in an environment where added value is everything, power is unreliable and farmers go out at night to turn on the irrigation pumps it’s deep cultural understanding.

What this means for the rest of the handset world is that even though India has a massive middle class – around 300 million –  and is one of the most lucrative markets in the world, it’s not the same place for anyone who isn’t Nokia. There are plenty of easier opportunities in North America, South America, Africa and other growing territories.

What should everyone who is not Nokia do in India? They should try somewhere else.

Other cool stuff

If you are in the UK and have a Windows Mobile phone with GPS you can play with the beta of SmartNav for mobile here. It’s a navigation service that gives turn by turn directions taking into account the prevailing traffic.
If you have an iPhone or iPod Touch you should check out Sentinel here. It’s a hugely addictive towers game.

Cat Keynes publishes her thoughts on the mobile phone industry every Sunday at www.catkeynes.com you can read the column  the previous Friday by subscribing here.
Follow me on Twitter here.

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