Sudhir Hasija-The Upwardly Mobile Entrepreneur
June 26, 2011 10 Comments
Sudhir Hasija is the chairman of the Rs 1200 crore homegrown handset maker Karbonn Mobiles.Here is a link to the company’s website:http://www.karbonnmobiles.com/.
His story will tell you how a person with few means can get into wholesaling and then into manufacturing.So for all would- be industrialists here is his story:
55 year old Sudhir Hasija, is the son of a government clerk. He left his home in Meerut, Uttar Pradesh, after clearing his Class 10 exams. He then moved to Hyderabad where he spent three years in a machine tools company and saved around Rs 3,000. He used this money to set up a business selling TV accessories such as antennas and trolleys in Chennai. It was a difficult struggle. He would climb to the rooftops of buildings bare footed in the scorching heat to install antennas. He used to wash at railway stations and stay in low-cost lodges. However he persisted and managed to built a thriving business that he expanded across other southern cities.
In 1996, when the pager and mobile phone revolution first started in Karnataka, Hasija bagged a lucrative contract to become the telecom hardware distributor for Alcatel-Lucent SA , France’s largest telecommunications equipment maker. Soon he ended up as a distributor for Nokia, the world’s largest handset-maker. He remained their distributor till 2003. As more global firms started to tap India’s booming telecom market, Hasija got another opportunity from Samsung Electronics Co , the world’s biggest television maker to become their distributor for entire South India.Within 6 months Samsung made him distributor for the entire country.
Then 3 years back when many Indian companies started to make their own handsets to tap the country’s booming mobile handset market, Hasija too jumped in. He gave up Samsung in 2009 to start his own mobile phone brand Karbonn. As he puts it,”I thought of building my own home, rather than living in a rented house. I had enough experience to take the risk and my children had also grown up.”Hasija founded Karbonn as a joint venture between his Bangalore-based distributing firm United Telelinks and Delhi-based Jaina group run by his long-time friend Pradeep Jain, who was also a distributor of mobile phones.
From its 2009 beginnings in an old office block in Bangalore with Hasija’s savings and a 100 crore capital from IDBI bank, Karbonn now has a market share of 4.5% in India. The mobile handset industry in the country was valued at Rs 3,200 crore in November 2010.Excluding the grey market,120 million handsets were sold in India in 2010. Hasija now sells over six lakh phones in a month.This is how Hasija explains his success:”I understood the psyche of Indian population such as value for money and attraction towards innovation.” Karbonn made its debut with phones, which could hold two SIM cards that allowed the use of two services without the need to carry two phones at the same time.They were also designed to have a longer battery life, a real draw in areas with irregular power supply. This innovation and low pricing clicked for Karbonn. After sales service and visibility even in rural areas helped Karbonn crack not only the the urban market but also penetrate the rural markets, which were untapped.
India’s mobile phone market expected to grow by nearly a fifth over the next five years. Karbonn hopes to ride this wave of consumer demand.However there are challenges to be faced.Karbonn is not the only home-grown mobile phone maker.There are others like Micromax giving it competition.In fact the very success story of Karbonn attracts new entrepreneurs to the market.
Also as Karbonn expands any flaw in the quality of service, distribution channel and post-sales service will mean a drop in growth.These days it doesn’t matter if the brand is foreign or Indian, customers are now agnostic to brands .Consider the fate of Nokia, which once held a 72% share of the Indian mobile handset market!
Moreover technology evolves fast.It is now a challenge to stay afloat in a market where newer communication devices pop up with metronomic regularity. To deal with the challenge Hasija is in final-stage talks to buy a South Korean cellphone design house in an all-cash deal of about $40 million. The deal will be financed with a portion of the $250 million that Karbonn expects to garner from private equity firms . The 150-member the Korean design-house will closely work with Karbonn’s team of software developers in Bangalore. Handsets designed by the Korean firm will be tested at Karbonn’s Bangalore software development facility before being shipped overseas. Karbonn plans on targeting not just the Indian markets with these phones but also other emerging markets in Africa and Latin America.Also later in the year the company plans on releasing a line of low-cost tablets to compete with Apple’s iconic iPad and Samsung’s Galaxy Tab but priced at half to one-fourth of what the global majors sell at.With the launch of the new line of tablets the company will be competing on full terms with the multinational majors. A start-up challenging major manufacturers was not possible 10-15 years ago but now entrepreneurs with access to technology need to only understand customer need, manage the supply chain, identify good vendors and maintain quality to successfully do so.And entrepreneurs like Sudhir Hasija show us how.