Experts' View January 2015

  6 min 17 sec to read

Dikesh Malhotra, President, Integrated Mobility Solutions
Dikesh Malhotra
President, Integrated Mobility Solutions
‘‘Samsung has many exciting new products in 2015’’
What are the reasons behind the huge popularity of Samsung smartphones in Nepali market?
Samsung is the number one mobile phone brand in the world, with highest market share in total mobile phone sales and highest market share in total smartphone sales. One of the reasons behind its high popularity is that the company is investing millions of dollars every year for research and development where other companies fail to do that. Samsung is currently known for its innovation and has full range of products catering to different individuals with different needs. The prices are also very competitive and Samsung smartphones have the best features. In addition, our after sales service is also the best as we have given highest priority to customer service.
IMS was recently rebranded as Integrated Mobility Solutions. What is the reason behind this? 
While doing my MBA in UK, I had a guest speaker who talked about branding. He mentioned that a company’s name should have a meaning. Either it should relate to your business or it should have an emotional value. I could see neither in our old name. Being a pioneer in the mobile phone industry, I wanted a name that could explain the business but wanted to keep IMS constant as our stake holders were familiar with the term IMS. Before it was called International Marketing Services and now it’s called Integrated Mobility Solutions.
What is the market share and growth rate of Samsung smartphones in Nepal? Are you satisfied with the smartphone penetration rate in Nepal?
We hold a major portion in the smartphone category with a market share of 75 per cent. Compared to 2013 we grew by 51 per cent in Nepal. 
Smartphone market has saturated already in some of the developing countries but it is still growing in Nepal. I see a lot of opportunities in Nepal in 2015 where a lot of people will be switching from feature phones to smartphones. The growth rate outside Kathmandu would be higher in 2015 compared to the growth rate in Kathmandu.
How is Samsung's premium smartphone segment faring in the Nepali market? Which category of smartphone is your company selling the most? 
Our flagship smartphone segment has two categories – Note Series and S series. Both the series are best in its class. People who like to have everything in a smaller screen size chose the Galaxy S series and people who like something big with an addition of S pen choose the Galaxy Note series. We had launched the S5 and Note 4 in 2014 and next year we would be launching the S6 in the first half and Note 5 in the second half. The sales of these flagship devices are increasing every year. But if we look at the entire smartphone range, Grand II was the highest selling model in 2014.
Unauthorized sellers are selling huge quantities of smartphones in the local market even after the Nepal Telecom Authority (NTA) enforced the type approval for imports. How has this affected the market?
Firstly the unauthorized selling of smartphones can only be controlled if the government takes a strict action against illegal importers as these importers are not paying any taxes to the government which in itself is a huge loss to the country’s economy. If I had a talk about it at an individual level and how it affects the end consumers, I would say that every phone is customized specifically for each country. 
The retailers who are selling these illegally imported phones lie to the consumers saying the products are same when it’s not. The Samsung phones that are legally imported in Nepal by IMS go through a field test where the phones are fully tested with the operators in Nepal to check its compatibility. The software is also customized specifically for Nepal. Before, there used to be a huge gap between the legally imported Samsung phones and the illegally imported phones. But in 2014, we have managed to reduce the gap lowering our prices and we have provided many schemes to the consumers where our prices become a lot cheaper. During Dashain, we gave Rs 16,000 cash back offer in the purchase of S5 which is the biggest discount ever given on a mobile phone in Nepal. 
It would be difficult for Samsung alone to stop the illegal phones, but if all major brands would join hands with some support from the government, this issue would be minimized to a high extent benefiting both the consumers and the entire nation.
What kind of policies should the government endorse to control the 'gray' market?
There was an article which came in the news media few months back where it was mentioned the government is trying to implement a policy where all the national distributors of all the brands would have to register all the legally imported IMEI numbers with the operators. After that only the registered IMEI numbers would work in Nepal and the unregistered would not work, blocking all the illegally imported phones and making it almost useless and worthless. This is the best option but if this process would take some time, the government should take strict actions against the illegal importers and sellers of these illegally imported phones.
How is the competition in country's smartphone market? How is Samsung facing the competition in the wake of rising sales of Indian and Chinese brands? 
The competition is definitely rising but has not been a major threat to us as the brands that are currently available are mostly focusing on feature phones and entry level smartphones. Samsung’s biggest competition is Apple and as we did not have an authorized distributor for IPhone there was no competition for us. But as the distributor has been appointed recently, the competition would now start. I think they will need to work hard on fighting the gray market first as currently over 90 per cent of the Iphones in Nepal come through the gray channel.
What are the Samsung products lineups for the future?
Samsung, being one of the most innovative brands, has already prepared itself with latest and the most technologically advanced products. 2015 will be an exciting year for all the gadget lovers and Samsung has many exciting new products. We can expect some metal design in the first quarter.


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