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    Battered by competition, Intex plans to make products for Chinese firms


    It has found an innovative plan to deal with the scourge that all but wiped off India's mobile industry.

    Intex sales has been declining year-on-year after touching a peak of Rs 6,233 crore in FY16 due to the entry of Chinese brands.
    KOLKATA: This may be a classic case of ‘if you can’t beat them, join them’.

    Bowing down to the Chinese handset brands which has almost wiped away the domestic mobile phone industry, the second largest home grown maker Intex Technologies is now planning to contract manufacture for the Chinese to make a turnaround.

    Intex promoter and director Keshav Bansal said in the light of tariff war between the US and China, few Chinese companies are in final talks with Intex for manufacturing and export of products to USA from India. This, he expects, will be one of the key strategy to revive the company. Intex has been badly hit by Chinese brigade of Xiaomi, Oppo, Vivo, Intel and Realme.

    In 2018-19, Intex Technologies has become a third of what it was in FY17 as per its latest filings with Registrar of Companies sourced from Veratech Intelligence. Revenue from operations plunged by 52% to Rs 1,387.3 crore in FY19 as compared to the previous fiscal.

    Intex sales has been declining year-on-year after touching a peak of Rs 6,233 crore in FY16 due to the entry of Chinese brands. The company, which was profitable all this while, also plunged into losses last fiscal posting net loss of Rs 281.3 crore as compared to a net profit of Rs 13.8 crore in 2017-18.

    The senior executive of another erstwhile leading Indian brand, who requested anonymity, said the company is also working with a Chinese contract manufacturer. He said Chinese companies are only looking at partnership with Indian firms who have their own manufacturing plant to utilise it.

    “It is difficult to match China in scale and speed. We cannot compete with the Chinese in the cost of assembling which goes to a low of Rs 30-35 per unit for feature phones and Rs 100-Rs 250 per unit for smartphones without SMT assembling,” he said.

    Veratech’s founder Mohit Yadav said one-third of Intex’s turnover comes from cellphones where it is facing stiff competition from Chinese brands. “This has led to a sharp decline in the company’s revenue and net profit. Company’s USP is value for money where Chinese have an upper hand, and it will need a completely new strategy to revitalize growth,” he said.

    Bansal said the entry of Jio, Chinese players and predatory pricing by ecommerce players have triggered this decline of revenues of all Indian handset companies. He said Intex has planned new products for launch in 2020 such as those with artificial intelligence, smart home and office solutions, security surveillance products, personal care, smart watches and fitness bands.

    As per market trackers, Indian handset brands share in the smartphone market has come down to less than 3% in July to September as compared to 8% same period last year with five brands – Xiaomi, Samsung, Vivo, Realme and Oppo – together controlling over 87% of the market.

    The Indian brands have less than 1% share in smartphones, while in feature phones Lava and Karbonn have managed to stay in the league of top five.
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    5 Comments on this Story

    srinivasan ranganathan444 days ago
    Joining the chinese is perhaps the biggest faux pas indian companies are doing because they will use them and later swallow them. I wonder why the indian government cant bring in protectionist laws through quality standards and quota allotment for import like the US does on garments and other goods as well. There is then the fear of spying and cyber attacks by chinese companies on sensitive installation in the future.
    Partha Pratim Dutta445 days ago
    Indians do business but do not manufacture and unlike China, here the Communist Parties will not allow such low costs. So, what's the way?
    I445 days ago
    The fact is that Chinese are indirectly entering India like this only, You see paytm, Zomato etc has huge big chinese company holding.
    India lacks in Innovation and I wonder why our Big Indian companies not investing in them !
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