Our forecasting ensures that Moto products never go out of stock on Flipkart, says Marcus Frost of Motorola Mobility

This Q&A first appeared in dna of money edition on March 12, 2015. 

Marcus Frost, senior marketing director, EMEA & APAC, Motorola Mobility UK Ltd, was in Mumbai to discuss the company's journey in India post being acquired by Lenovo, smartphone sales in the last four quarters, new line of products, the changing definition of value-for-money in the Indian affordable smartphone category etc. Edited excerpts...

Motorola has come a long way from being itself to being a part of Google and finally getting acquired by global IT hardware major Lenovo. Are things better now than before?

We feel super strong and it couldn't have come at a better time. While Motorola is strong in certain geographies globally, association with Lenovo makes it more stronger now. It has got us ready for our part of the journey now where we need scale. Google doesn't make things while Lenovo makes a ton of things thus giving us major supply-chain efficiencies and that value we are able to transfer immediately to the consumer. The products being developed and conceived are very different what we they were before and after the acquisition. You will see more value and choices coming from us going forward.

You would also be competing with Lenovo for the same set of consumers now?

It is highly complimentary than competition. We were about 5% share and Lenovo was about 2-2.5% so together we are about 8% market share. So we have another 92% to take care of rather than cannibalising each other.

It's been a year now operating as part of Lenovo now. How has the journey being?

The journey has started well with Moto G. Since all consumer expectations couldn't be met with just one product we introduced Moto E targeting the affordable smartphone segment. In the hi-end category, we launched the Moto X followed by the wearable technology in the form of Moto 360. Now we have got into new generation products with the Moto E 2nd generation smartphones. This smartphone has been bundled in a way to that will change the idea of affordable handsets while still being classy. The market is changing fast and so are consumer preferences not only in India but globally. So we will keep innovating not only in terms of products but also the marketing strategies, service levels etc.

How has market responded to the products? Could you share sales numbers?

Last year in February is when we started operating under Lenovo and we have received a very overwhelming market response for our products. In the last ten-and-a-half months we have sold three million handsets, which is a testimony of how well the brand is being received.

That's a good number? Does it meet company expectations?

It's a great number to write home about. Also a validation of the focus we have had on what the Indian consumer wants. And efforts are being made to ensure we are delivering on that.

Given the kind of products that are likely to be introduced, can this number easily double in the next 12 months?

We are not chasing numbers or for that matter market share at the moment as the focus is more on delivering innovation, value and choice to the consumers. Besides, it's never so easy to double the numbers. The way we look at it is, if we keep doing the right things this year like we did in 2014 the numbers should happen. While we don't really know what that right number is but we wouldn't want to stop just there and possibly exceed that figure. It all depends on how the entire ecosystem shapes up as well but our aim is to keep on doing the right things.

On the market share part, all I can say is that Motorola and Lenovo put together is the third largest vendor across the world and we are the only viable challenge to number one and number two. In India the story is pretty much the same.

A broader distribution as against the Flipkart only way of reaching out to customers could help reach / exceed that right number?

Online-offline put together, Flipkart is the largest retailer reaching out to 25,000 pincodes in India. E-commerce works for us as our forecasting ensures that Moto products never go out of stock. We also don't do flash sales because if someone is keen on buying a Motorola device what right have I got to stop him / her from doing so. I cannot, not offer consumers a choice.

While the Rs 10,000 to Rs 15,000 bracket was a major play for smartphone makers, the sweet-spot seems to be moving south to Rs 5,000 to Rs 10,000 now.

There are different needs from different sets of consumers and just one product will never be able to meet those needs. We are definitely trying to drive value and hoping to move it down and down the change and that's exactly what the Moto E 2nd generation does.

Any plans to join the “Make In India” movement announced by prime minister Narendra Modi?

We do keep evaluating the option but there is nothing happening on that front right now. The reason being that, what you see is a price side of the economics, but if you see the supply side of the economics it may not necessarily make sense.

Xiaomi was to launch own online sales platform in India. Would you be looking at a similar option?

While there are multiple options to explore and that is what the strategy team does, but there is nothing right now that we have finalised on.

This is just one example how Amazon.in cheats people shopping online

People mostly call me as the window shopping guy who will visit emarketplaces like Amazon.in, Flipkart.com, Snapdeal.com, eBay.in, Shopclues.com etc. but still visit a physical store to make that final purchase.

Yeah call me old-fashioned but there are very good reasons why I still choose a retail store over online shopping.

Let me give you one example right away.

A promotional mail that landed in my Gmail inbox today carries a subject line that says Samsung Galaxy S4 available at Rs 17,999 @Amazon.

I click for more details and see a promotional offer by Amazon.in that says "You Save Rs 23,501" i.e. a huge discount of 57% with a Buy Now box just below it.

After clicking the Buy Now box, I am taken to the Amazon.in webpage that says maximum retail price (MRP) of the smartphone is Rs 23,500 and the deal price is Rs 17,999 thus giving me a saving of Rs 5,501 i.e. a 23% discount on MRP. 

So my discount or the money I save buying the smartphone online is already down from 57% to 23%.

Just to be sure that the 23% saving was for real, I decided to further dig into the pricing of the smartphone on the Samsung India eStore. And what do I find there?

The Samsung Galaxy S4 smartphone is being sold on the Samsung India eStore for Rs 17,999. While it also says 'Out Of Stock' it certainly validates the fact that the smartphone doesn't cost more than Rs 17,999 and that price is inclusive of all taxes.

What started as a promise of 57% savings on Samsung Galaxy S4 smartphone came down to 23% after checking out the deal on Amazon.in. A further due-diligence on its price gives out a completely different picture, which is 'That I Was Not Saving A Single Penny' buying the smartphone from Amazon.in.

I guess being a window shopper on the various eCommerce platforms has its advantages and disadvantages. I am certainly not regretting because I see more advantages than disadvantages here :-)

Rajeev Menon is now COO of Marriott Intn'l for South-East Asia & Pacific region

Global hospitality major, Marriott International Inc. promoted Rajeev Menon

Rajeev Menon

as the chief operations officer (COO) for the South-East Asia & Pacific region.

Based out of Singapore, Menon will be a key member of the continent’s senior leadership team and will function as the operational business leader for the region, under his new responsibility. He will also help drive key initiatives and ensure implementation of brand discipline programs.

Over the last 7.5 years, Menon was area vice-president - South Asia as well as Pakistan, Malaysia and Australia during various periods of his assignment. Menon has led the growth of India from six operating hotels in 2007 to 27 Marriott managed hotels operating under seven brands (with a pipe-line of another 49 hotels under construction). 

Under his leadership, Marriott has been recognised as one of the best performing international hotel brands in India and has received numerous best employer awards for the past several years. 

Menon joined Marriott in 2001 as the general manager of Renaissance Mumbai Hotel and Convention Center and Marriott Executive Apartments, Mumbai. In 2004, he moved to Sydney, Australia where he served as the general manager of Sydney Harbour Marriott and Country General Manager for Australia.

A global leading lodging company based in Bethesda, Maryland, USA, Marriott International currently has over 4,100 properties in 79 countries and territories and reported revenues of nearly $13 billion in fiscal year 2013.  The company operates and franchises hotels and licenses vacation ownership resorts under 18 brands.

JWT set to acquire Social Wavelength

JWT, a leading global marketing communications brand and India’s leading integrated communications company, is set to acquire a majority stake in Social Wavelength, India’s leading social media agency. A full service agency, Social Wavelength specialises in social media offerings from strategy to executionand includes social media marketing, online reputation management, social CRM and social media for HR.

According to Hareesh Tibrewala and Sanjay Mehta, Joint CEOs, Social Wavelength, this acquisition is a logical confluence of social media and mainline expertise, coming together to create integrated communication for brands. "The rich experience of five years that we have, in this young industry of social and digital media, will find the next leap of growth, through this partnership. A socially connected world is going to create new challenges and opportunities for brands, and we will create solutions to help brands navigate those challenges,” the duo said.

Social Wavelength has established itself as India’s leading social media agency within a short span of five years. Founded in 2009, the agency now has over 170 professionals who offer social media communication services, social media listening services using Radian6, influencer outreach program, application development, video and rich media content creation and media buying to over 50 leading brands across their offices in Mumbai, Delhi and Chennai.

Colvyn Harris, CEO, JWT South Asia, said, “We want to be a critical resource partner across the many solutions we provide to our clients. As we continue to relentlessly transform our offerings, Social Wavelength adds a huge dimension to our existing clients and the brands we steward. Across the marcom value chain and across various digital touch points the skills and capabilities of Social Wavelength will be that edge.”

This acquisition will add value to JWT’s delivery capabilities across social media monitoring, online reputation management, digital ideation and production. JWT Asia Pacific has invested heavily in expanding its digital footprint over the last two years. In addition to the acquisition of Hungama, in India, JWT acquired Post Visual in South Korea in 2013, and took a stake in Converge, in Pakistan, in 2012. XM Asia, a digital agency owned by JWT, also acquired Designercity, in Hong Kong, and Thomas Idea, in Thailand, in 2013, and XM Gravity in 2012.

Glen Attewell replaces Sandeep Dhar as CEO of Tesco HSC

Tesco Hindustan Service Centre (Tesco HSC), the global technology and operations centre for Tesco operating out of Bangalore has appointment Glen Attewell as chief executive officer. He succeeds Sandeep Dhar, who spent over five years as CEO and is leaving the business.

In this role, Glen will work closely with the leadership team to continue the journey of Tesco HSC in becoming a fully integrated part of Tesco’s multichannel strategy. He will report to Alison Horner, Group Personnel Director, who serves on the Tesco executive committee.

Established in 2004, Tesco HSC is the operations and technology centre for Tesco, a leading global multi-channel retailer and is the first fully-owned retail operations centre set up at Bangalore, India by any major international retailer.
Currently employing over 6,800 people, HSC is an integral part of Tesco and drives value across IT, Business Operations, Finance, Property and Commercial Buying to Tesco’s operations globally.

Tesco is the world's third largest retailer and enjoys a market leader position in six of them. It has a turnover of £72.4 billion ($120.25 billion), operates around 6,784 stores and employs over 530,000 employees across 12 countries.

Voltas, Dow Chemical plan JV to tap water and waste water treatment market

Tata Group company, Voltas Ltd and Dow Chemical Pacific (Singapore) Pte Ltd, a member of the Dow Group Companies, are joining hands and forming an equal joint venture company in India. The proposed entity christened Voltas Water Solutions Pvt Ltd will tap the growing Water and waste water treatment market in the Indian subcontinent.

According to company officials, the JV will market and distribute standard packaged water treatment systems and waste water treatment systems of capacity up to 20 m3/hour. These systems will be primarily targeted at the residential and commercial complexes and, light industrial markets in the Indian subcontinent. The JV’s operations would include designing, procuring, testing, marketing, selling and servicing of such standard water treatment systems and waste water treatment systems.

Commenting on the development, Snehal Desai, Global Business Leader for the water and process solutions division of Dow Group, said, "Water treatment has significant business potential in India, and Voltas is an ideal partner with a strong brand reputation, and a wide-spread sales and service network. As part of our long-term strategy, we intend to establish the joint venture, to fully exploit the untapped potential of the Indian market."

Having identified water as a key focus area for the Tata group, Voltas officials said that Dow Group's unrivalled know-how and technological leadership in the water treatment space will help Voltas Water Solutions cater to the growing water treatment requirements of the Indian subcontinent. 

"The partnership will simultaneously leverage the brand and distribution strength of Voltas, along with the technology prowess of the water and process solutions division of the Dow Group. We will work towards establishing the joint venture as a leading provider of water treatment solutions," said Sanjay Johri, managing director, Voltas Ltd.

The water and waste water treatment market targeted by the new company is largely catered by unorganised players currently. The new joint venture, company officials said, will provide a branded and differentiated product line, with a focus on quality and service delivery.

Matrix Partners invests in MSME lender Five Star Business Credits

Matrix Partners India has led the first institutional round of funding in Five Star Business Credits (Five Star), a leading small business finance company that provides secured loans to micro and small enterprise customers (MSME). Five Star with its proprietary secured lending model has catered to more than 5,000 MSME customers over the last 5 years.

India has 29.8 million MSMEs and a further 30 million MSMEs in the unorganised sector. Formal banking and financial channels find it challenging to address the needs of MSME customers primarily due to the challenges in assessing credit quality of such customers. 

According to D Lakshmipathy, Managing Director, Five Star, MSME lending is a significantly underserved market in India not addressed by formal financial channels. "We have built a unique credit assessment model for deserving customers that run small but healthy businesses and all our loans are collateral backed. This round of funding from Matrix should help us further expand our branch footprint and enhance our funding base for long term expansion,” said Lakshmipathy.

Operators of small shop owners (provision stores, small restaurants, textile stores, bakery outlets, medical stores etc), small and medium machine shop operators, self employed people etc are key customers of Five Star that also provides loans for the purpose of home improvement to MSME customers. The company is present across 30 branches in Tamil Nadu and is planning to further expand its footprint across different states in India.

“Five Star has a highly differentiated, secured and sustainable lending model to address the large, underserved MSME financing opportunity. Financial services is an important focus area for the firm. We share Lakshmipathy’s vision and passion for this sector and look forward to being his partners in this journey,” said Rishi Navani, Managing Director, Matrix India.

A private investment firm Matrix Partners has Rs 3,000 crore under management and invests in companies targeting the Indian consumer market at the seed, early and early growth stages. It has a global network of funds investing in the US, China and India with $3 billion under management.

So far, Matrix Partners has invested in several market leading companies including Muthoot Finance (gold loan NBFC), TreeHouse Education (preschools), Cloudnine (maternity and infant care chain), Mswipe (mobile POS), Verse/NewsHunt (vernacular mobile platform) and Quikr (online classifieds).