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PRAN–RFL group which announced venturing into the highly-competitive handset market early this year, is set to release its first batch of smartphones from its factory in Narsingdi soon.
Time Is Critical
Market operators welcomed the food and beverage behemoth in the handset market. Sales of handsets have slowed down amid high inflation in the country. Besides, volatilities in prices of commodities in the global market with the war between Russia and Ukraine have put pressure on the overall economy. The continuous depreciation of taka against the US Dollar is mounting the import inflation in the country that largely depends on the international market for outsourcing raw material, chemical and energy items.
Smartphone Sales Slow Down
The downward trend in sales of handsets surprises local assemblers of globally reputed brands. They argued that the sales of the smart handset were very good even at the peak of the Covid pandemic in the past year. Increasing the value-added tax by 5 per cent on handset sales from the current financial year could be another reason for the slowdown in sales of smartphones. The majority of people are resorting to tight belting strategies to tackle inflation which has already crossed a nine-year high to 7.5 per cent in June. Smartphone sales have dropped to 6 lakh units in recent months from about 9 lakh units in 2021, said the sector operators.
PRAN Targets 1 lakh Smartphones
Sales data kept by the Bangladesh Telecommunication Regulatory Authority also showed that around 14 lakh handsets were manufactured in the local factories in January while the production slumped to 6.7 lakh in May and 9 lakh in June. The World Bank has predicted that the current economic crisis in most parts of the globe would continue until next year. The Pran-RFL group insiders said they had already calculated the risk factors while setting up the manufacturing plant at Palash in Narsingdi. The factory will be capable of manufacturing 1 lakh smartphone sets and over 3 lakh feature phones per month. The manufacturing unit to be run under RLF Electronics, a sister concern of RFL Group, will market its product with the brand name ‘Proton’.
Paperworks Pending
The group’s marketing manager Kamruzzaman Kamal told the fortnightly that they would be able to start promotion of the handsets once paperwork with the regulatory agencies concluded. He said they were also considering exporting the items to Nepal and Bhutan. The Pran-RLF group has a good reputation in marketing. It has a strong marketing network throughout the country and also in the United Arab Emirates thanks to a robust Bangladeshi diaspora. The group’s study on the smartphone market, according to its insiders, has suggested that the majority people do not have the capacity to buy smartphones marketed by global brands due to their high prices.
Market Dynamic
However, many of them will buy and use smartphones if they have the opportunity to buy them at affordable prices. Pran-RLF is likely to bank on this sentiment of the people to make its cell phone venture a success. Since 2013, Pran-RFL has been marketing electronic items including televisions under the brand name Vision. However, its market share in LED television is slim demonstrating that the group could not make any good competition with other manufacturers. However, the dynamic cell phone market dynamic is different from other electronics items.
Rise of Xiaomi
There has always been a good market for budget phone sets. Xiaomi which released its first smartphone in China in August 2011 entered Bangladesh in July 2018. It received huge responses from smartphone consumers because of its outstanding features and price point. The smartphone market of Bangladesh is driven mainly by features and price. By the end of 2017, the share of smartphones went up to almost 50 per cent from 28 per cent. Xiaomi is among the top brands chosen by the young generation in 2022 with its well-developed local manufacturing facility and a wide entry-level portfolio with features like larger display size, huge battery capacity and improved camera.
Realme Makes Big Impact
Realme has also created big splashes with its budget sets in its three years of operation in the local market. One of its phones – Realme C21Y – has become the fastest sold-out phone on popular e-commerce platform Daraz in 2021. Around 3,000 units of Realme C21Y had been sold out within just a minute. During the flash sale, interested people got the chance to buy this phone for Tk 11,490 whereas its original price was Tk 12,490. Other than this, buyers who purchased C21Y during the flash sale enjoyed a 12-month extended warranty, free internet offer from GP, Robi and Banglalink, got Realme water bottles as gifts and could avail of a 3-month EMI facility.
Samsung Adds Budget Sets
One of the market leaders, Samsung, has also newly added budget smartphones and their steady performance in the entry- and mid-price levels. Samsung’s active promotions and marketing helped it remain among the top three despite falling from its first position in the first quarter of 2022. Amid the presence of global brands, electronics manufacturer Walton, a local company, introduced smart handsets in 2018. It exported its first shipment to the USA in 2020. It also exported smartphones to Nepal. But compared to its dominance in other electronic segments like refrigerators, the group’s smartphones are less popular. However, Walton’s market share in the feature phone segment is much higher than its smartphone segment. In fact, its share in the smartphone segment at the local level is in the category belonging to others after Xiaomi, Samsung, Oppo, Realme, and Vivo.
Features, Price Matter Most
So, it will be interesting to see what kind of features Pran-RFL can offer with its upcoming smartphones to attract young people and users of featurephone. Unless it can attract the young, chances are slim for the group to challenge global reputed assemblers on the local turf. Appreciation from the young will play a big role for the group to win the credibility of its products to others.