New Delhi: Chinese smartphone maker Honor will re-enter the India market in September in a new avatar. The brand, formerly owned by Huawei, is being licensed by Gurgaon-based PSAV Global, which will invest ₹1,000 crore via debt funding to set up operations in India and be fully controlled by local partners.
Madhav Sheth, the former head of erstwhile No. 4 smartphone player Realme, who is now the chief executive of Honor Tech and one of the two partners in PSAV Global, told Mint in an interaction that the strategic joint venture partnership will ensure the decision making is done by the local partners, which will be different from other Chinese players operating in the market where strategic decisions are not in control of India operation heads.
“Any of the Chinese manufacturers who are functioning in India right now, are 100% Chinese-owned equity companies. Their decision-making is also by Chinese people. This would be a 100% Indian equity-owned company; we will be investing ₹1,000 crore by December in technology transfers, product and software development, and service setups in India,” Sheth said.
Honor’s re-entry will come amid a crackdown on Chinese companies where some apps have been banned, and at a time when the government has increased scrutiny of investments coming from border countries including China that now require mandatory approval.
Sheth noted that while Chinese products bring quality and technology to consumers, Honor will give the choice to consumers as a product with no ‘bloatware’, referring to pre-installed apps that users cannot delete, which are commonly found on Android smartphones sold by several Chinese brands. Sheth added that the strategic JV will become a yardstick of corporate governance for other companies to do business in India through the licensing or joint venture route.
“I’m disrupting this industry with this type of JV and getting into 100% licensing business. I’m opening up a route which will entice other brands to get into this. This is the way the business can happen In India,” he said.
Sheth noted that the company has got required approvals from the Indian government and is now looking to introduce a series of devices starting September through Amazon for the online market and multi-brand outlets for the offline market. The company is aiming for profitability within the year on revenues of ₹10,000 crore by December 2024. Sheth is also looking to locally source the bulk of the 300 components needed in mobile manufacturing, in addition to building local partnerships to secure technology transfers through joint ventures to improve the technology as well as skill sets needed for upgradation of the local supply chains and value addition.
Honor phones will be made in India in the coming months. Sheth said that the company was deciding on setting up manufacturing or getting associated with local manufacturing provider for partnerships. Devices including foldable smartphones will be available at price points ranging between ₹8,500 and ₹80,000.
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Updated: 21 Aug 2023, 07:10 PM IST
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