Generally, startups don’t get success in the initial years of launch. Companies struggle a lot in the beginning. They have to compete with the already established companies in that field.
Lava, an Indian Mobile Manufacturing Company, has totally different story. In the beginning, the company became one of the largest mobile manufacturers in India. Later, it did not achieve any milestones. Currently, If you ask about Lava from Indian Mobile users, they will scratch their heads to answer.
Early Success by Lava
“People get carried away instantly if they get success early”, said Shailendra Nath(SN) Rai, co-founder of Lava Mobiles. He was criticizing himself with this statement. He knows what he did after getting early success.
Lava International was founded in 2009 by Hari Om Rai, SN Rai, Sunil Bhalla, and Vishal Sehgal. It’s a Noida based company. Being an electronic manufacturing company, Lava develops smartphones, laptops, tablets.
Mobile phones were very costly in 2009-10. There was no existence of the smartphone market at that time. People used to have mobile phones only for calling purpose. Mobile phones were limited to big cities because of limited network infrastructure.
In the years 2011-13, the smartphone market saw a much-needed growth with 4G connectivity. Back in 2014, Lava had a total share of 3% in the Indian Mobile industry. In 2016, Lava became a major mobile manufacturing company with a total market share of 10%.
Chinese mobile companies also started establishing themselves. But they were nowhere in the competition. Xiaomi and Vivo together had a market share of 4% in 2016. At that time, Indian Cricket Captain Mahendra Singh Dhoni was the brand ambassador of Lava. In the same year, Oppo grabbed only 4% of the total mobile market. As per 2019 data, Xiaomi is the Indian Mobile market leader with a total share of 29%. In the third quarter of 2020, Samsung reclaims spot 1 in the Indian Smartphone Industry.
Downfall of Lava
Lava considers estimation error as its biggest mistake. They focused heavily on 3G devices. Chinese mobile industry grabbed the market with 4G devices. Chinese businessmen knew that 4G is the future. Devices without 4G support will not survive. And they were right. Lava failed badly.
Another major reason for Indian Mobile companies fall out was the lack of budget, whereas Chinese Companies invested heavily in India. Companies like Xiaomi, Vivo, Lenovo, and Oppo had deep pockets. They did not hesitate to spend money in any related department.
In 2020-21, Lava holds the market share of 17.36% in the feature phone category. Feature phones are the early generation phone with button-based input and small display. But it is not a piece of good news. Most mobile consumers have shifted to smartphones.
Lava is the third biggest feature phone maker in India and holds spot 1 among Indian feature phone maker. Surprisingly, it is the biggest smartphone maker among Indian mobile manufacturers with 0.39% of the total market share.
Future of Lava Mobiles
Lava founder Rai is not ready to give up. He feels that game is not yet over. After having stiff competition in mobile phones, Indian companies like Micromax, Intex also started manufacturing TVs and washing machines. Lava focused on the Mobile industry only.
“If you sense failure in one area, you can’t jump to another area and try to save yourself,” said Sunil Raina, president and business head of Lava.
No investment in R&D and manufacturing was another mistake of Lava International. They were relying on cheap manufacturing in China. They thought that the company should focus on market share instead of manufacturing. And the strategy failed.
Mobile design, manufacturing, and all supply chain activities were outsourced by Lava. They were just putting the brand name on the ready-made product. Customer service was the major activity of Lava. ” On the basis of other’s hard work, you can’t become a millionaire”, Rai realized now.
A few months back, Lava has invested around Rs 800 crore in R&D and manufacturing unit in India. The company has started its own manufacturing unit that has the capacity to build 26 million smartphones and 40 million feature phones yearly. Lava is also manufacturing mobiles for Nokia.
Lava is focusing on the Rs 5000-10000 smartphones category for wooing feature phone users to own smartphones. Lava is also planning to export smartphone devices to the USA and Europe. The company is in talks with American companies like AT&T, Verizon, and T-mobile.
Future Journey is not easy for Lava. The feature phones market is sliding every year. There is no guarantee to become the smartphone market leader on the basis of feature phone popularity. Instead of Make in India, Vocal for local initiatives and current Indo-china tussle, 7 out of 10 mobile users buy Chinese mobile phones.
Lava had revenue of approximately Rs 5400 crore in the last financial year. Lava needs loads of effort and resources to establish itself in the Indian Smartphone market.