We go for fundamentals: Florian Seiche

Florian Seiche, chief executive officer of HMD Global, the Finnish company with a licence to sell Nokia-branded phones, reckons he knows the code to crack the second biggest smartphone market in the world: A dedicated India approach. On his third visit to the country since last October, Seiche is not only betting big on Nokia’s online strategy to increase its market share, he is also sharpening Nokia’s aggressive pricing play. What the former co-founder of HTC’s smartphone business is also doing is looking beyond nostalgia marketing. “If you take India as a single country, then it is already the single biggest country for us,” he tells Forbes India in an exclusive interview. Excerpts:   

Q. How has India grown for Nokia since your first visit here last October?
India has done really well in the last 10 months, and things have moved drastically since I first came here. India is important to us, very important. I will be here more often. It’s a key market already. It’s already one of our biggest markets. But if we look at the future, then definitely India is core to our growth.

An indicator about how crucial India is for us is to see where it is in terms of size. We divide the world into eight regions, and India happens to be one of the regions. The only region bigger than India is Europe, with all its countries together. But if you take India as a single country, then it is already the biggest single country for us today.

Q. Are you looking at India as a value market or a volume churner?
We look at things in a slightly different way. Firstly, we are still much smaller than others from a global perspective. Secondly, China is not our home market. So we don’t look at India from a China angle. We have a chance to make a laser-focussed plan for India. We want to be as quick as possible in having the end-to-end capability in place, which means defining the right product portfolio at the right price points, aggressive offerings to consumers, and a correct mix between online and offline.

Q. Does a partnership with Flipkart mark the start of Nokia’s missing online strategy?
The next phase of growth in India will come from online. We are still strong in the offline market with our feature phone base, distribution and retail presence. The big effort during the first half of this year was the launch of a new portfolio of smartphones. We used it to mainly strengthen our offline presence by investing in a new retail in-store presence. The collaboration with Flipkart is also for the future models, wherein we will share insights. They will share what’s selling well, what’s not and where the price pockets are. We are not saying we will do everything with them, but we are making a tailor-made plan so that whatever we execute, the chance of it being successful is high.

Q. Is online crucial for Nokia to crack the millennial code as well?
We want to exploit online for several reasons. First, because a lot of millennials, young people are buying phones online. A lot of the marketing is happening online and in social media. We want to improve the capability for all the digital and social media to reach out to this segment of consumers.

Q. Last year you tied up with Amazon in India but it didn’t take off…
We were not fully ready in terms of an end-to-end piece dimension. We got the pricing right, the marketing piece was perfect and we even had a great campaign together with Amazon. But we didn’t have enough phones to support this opportunity. All the pieces have to be together to succeed. Now we are really serious to step up the game.


Q. Your second quarter smartphone market share in India is just 2 percent and overall handset share languishes at 5 percent. With over 80 percent of smartphone market share with the top four players, do you still give yourself a chance to break into the top five?  
Yes, definitely. Though the bar to get into the top five has been raised, our commitment to make it is still there. And to do that one needs to have a holistic understanding of the market and make right investments across an end-to-end spectrum.

Q. This May HMD raised $100 million. Would a chunk of that be used in India?
Yes. We are covering the top 20 percent of retail stores with our Nokia branded fixtures, and we did some IPL sponsoring as well. So we are making investments here.

Q. The Chinese dominate the Indian smartphone market, and all have their USP based either on some features like camera, battery or pricing. What’s your differentiation?
We don’t intend to tactically compete with the Chinese in terms of specs. We don’t speak about megapixel or ROM. Our key USP is the quality of the phone. Hardware quality and lifetime quality promise are our biggest differentiators. The feedback from consumers is incredible.

They are happy and appreciative with the things we are doing such as monthly security update or future upgrade so that the phone stays fresh and performs well. We are convinced that this differentiation is real. But we need to communicate this more. That’s why we are getting aggressive in terms of value for money offerings.

Q. So you don’t see any merit in loading a phone with as many specs as possible?
Everyday life experience matters. The consumers need to feel it when they use phones. In daily usage, some basic things like long battery life are ranked high by consumers. So we try to always keep an eye for those fundamentals. Others [rivals] might be more catchy or noisy in the short term and capture a lot of attention, but in the long term it might not be that meaningful. We go for fundamentals with the hope that this is long term, recognised and appreciated by the consumers.

Q. While nostalgia marketing helped you to garner share initially, what next?
We now would like to balance our approach. We are truly relevant for the young generation, and are now building local fan communities in every country. Take, for instance, the Middle East, where we have 1 million Facebook fans in the UAE. We are building this country by country.

Q. What have been your top learnings in India?
The No 1 learning is about the speed of execution. You can talk many strategies, you can talk as much as you want but the only thing that matters is what are you actually able to get out in the market. Speed of execution is really important. We need to focus on the big markets where we put our own team, make our own investments and this is definitely one learning we are now deploying for this year in India.

Q. Do you intend to make any special 4G feature phone strategy for India in terms of pricing? Jio has given a new life to the segment…
We are launching our 8110 in India but obviously we don’t expect it to be a massive volume driver because it’s priced premium. For the next year, we will look at how the market shapes on the 4G feature phone front. Obviously the reason this segment has grown so much this year is the Jio customer acquisition. But I think the bigger trend is definitely consumers going for smartphones and wanting to buy the smartphones.

Q. How do Indian consumers differ from their global counterparts?  
Focus on spec-price value equation is extremely high here. In other markets like Western Europe, people keep their phones longer. For them the quality dimension is if I buy the phone now, will it still work in two years and so on. This is already in their decision making factor, but in India if the spec looks good and the price is attractive, people buy it. In six months they will buy another one.

Q. Isn’t this an opportunity as well as a challenge for you?
Yeah. That’s why we really focus on marketing. We also need to talk directly to consumers and Nokia fans. We need to let them do the talking, spread the word to get in more consumers.

Q. You did a phenomenal job globally with HTC smartphones. Why did the brand not work in India?
It’s a history. Almost like a different episode of the industry. I think there is one learning for us as well. The context of the industry is changing at a superfast pace. The only fundamental lesson is that you should never take your success for granted.  You need to look to the future with a fresh perspective. Though HTC was a pioneer in the smartphone industry and able to innovate early on, it couldn’t make the brand work here.

One needs to be fully prepared to immerse with all aspects of product, price, marketing…everything dedicated for the Indian market. We are for sure committed to take this approach now.

Q. Have you conveyed the message of Android One to the consumers clearly? Do they know the difference?
I think work still needs to be done. To some users in the enterprise area, you can explain what Android One means. But to a young consumer, you should start the other way around, from the bottom up. Rather than talking about Android One, we talk about all the little innovations that come every day to the phone. And if users try these amazing stuff, one doesn’t even need to talk about Android One.  

Q. Realistically, do you give yourself a chance of ever having a chunk of the market?
Yes, definitely. We have the right foundation and we are going to invest and accelerate in a holistic way. That’s how we look at the Indian market.