Sub-standard Grey Market is the Biggest Challenge in India: PTron

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The company said that it has sold more than 2.5 million units of PTron mobile accessories in various categories like wired earphones, Bluetooth headsets, Bluetooth speakers, chargers, and smart gadgets

Ameen Khwaja, Founder and CEO, PTron

Ameen Khwaja (AK), founder and CEO, PTron, in an exclusive conversation with Electronics For You shed light on the consumer electronics (ACE) industry in India. He is of the view that IoT, within the possibilities that exist today, seems the most obvious thing to happen next. The company is aiming an expansion in its wholesale distribution channel in order to reach out to the offline retail consumers in 2019-20.

Khwaja, before starting his own venture PTron, has worked as a marketeer. He said, “My digital marketeer experience has helped me in establishing the brand in India. It helped me in understanding the online users shopping behaviour, what to sell, whom to sell, how to sell, and where to sell.”

Here are some more excerpts from the conversation with Ameen Khwaja

Que 1 – What makes PTron products stand-out?

AK – PTron focusses on component level detailing of all its products and has an extensive control over its cost and quality. This implies having strong relations with cost efficient & reliable manufacturing partners. With these capabilities and having our own in-house design team, we are developing our product design competence and have filed 3 patents already. Thereby, we can vouch for the originality and distinctiveness of our products. Also, we have a strict quality control procedure in place, through which all our products go through 5 levels of quality check to ensure that a consumer does not face any issue with our products. Additionally, PTron offers 6 months replacement warranty on all the products.

Our biggest strength is our control over manufacturing and understanding of Indian market and the consumer. More importantly, all our products are certified by FCC (US), CE (Europe), BIS (India) & Bluetooth (by BQB labs). Very few Indian brands in our segment and category can claim to have these.

Que 2 – What technologies, as per you, are leading the growth of smart wearables in India? Do you think IoT is one of them? What’s the future?

AK – Right now, consumers are focusing on smart wearables like fitness activity trackers and smart watches which help them maintain an active lifestyle. IoT within the possibilities that exist today, seems the most obvious thing to happen next.

Whether it’s helping you keep a track of your heart rate, ensuring you have your daily dose of water, the number of calories you burnt etc. All these gadgets can improve your life. I strongly feel that IoT is the next big thing. It has been developing at breakneck speeds since the very moment of its inception, often rapidly changing directions and taking new and unexpected forms- from leisure to workplace to healthcare.

Que 3 – How many categories are you present in? Do you have plans to add more products in your portfolio?

PTron Dynamo Z Power Bank

AK – Currently, PTron is present in wired headsets, Bluetooth headsets, Bluetooth speakers, chargers & cables, and smart gadgets. We listen to consumer feedback and continuously try to find out their needs, demands, along with areas of improvement.

With rapidly evolving consumer demand, IoT has become a commonplace, faster than many people anticipated. We are already planning to launch our own range of IoT products. Though consumers currently find other brands expensive, PTron will launch its IoT products at such price points that most consumers will find it reasonable and affordable. We are game for the opportunities this fast-evolving industry brings to us!

Que 4 – What are your targets in terms of revenue and market share in India? How do you plan to achieve them?

AK – The number of smartphone owners in India has been increasing exponentially, so are the mobile accessories bought along. Currently, the Indian mobile accessories market size is between INR 12,000 – 14,000 crores. According to industry reports, by the end of 2026, the same market in India is anticipated to reach a value of INR 24,500 crores (US $3,545 million), registering expansion at a stellar CAGR of 10.4 per cent.

Most of the demand will come from consumers moving up the ladder from unbranded to branded products with warranty, which as we foresee would be around 40 per cent of total mobile accessories market by volume. We are looking at a 10 per cent market share of this chunk.

Que 5 – What are the main challenges that you have faced in the India market?

AK – One of the biggest challenges was posed by cheap and sub-standard grey market products which dominated the Indian market until recently. This problem is not just restricted to India, it is a global issue. However, we are seeing a shift in consumer preference. For a marginally higher price, if one gets a product with warranty, a product that is safe to use, then consumers gravitate towards such brand.

This is precisely why PTron has succeeded and continues to do so. We strongly believe that stringent laws and consumer awareness will help in eliminating this parallel grey market to a large extent. With increasing consumer demand, we are also seeing regulatory reforms coming in, like requirement of BIS certificate for chargers and power banks.

Que 6 – Has your experience as a marketeer helped you in establishing the brand in India?

Ptron Quinto Bluetooth Speaker

AK – Yes, my digital marketeer experience has helped me in establishing the brand in India. It helped me in understanding the online users shopping behaviour, what to sell, whom to sell, how to sell, and where to sell. We are now actively building our offline sales channels too domestically and internationally.

Que 7 – How strong are you in the offline and online channels? Which channel is PTron’s focusing for expansion in India?

AK – PTron products are being sold online for the last five years. Initially we were only selling it online and targeted tier-1 cities. PTron’s growth has been promising since the inception of the brand. Till now, we have sold more than 2.5 million units of PTron mobile accessories in various categories like wired earphones, Bluetooth headsets, Bluetooth speakers, chargers, and smart gadgets.

PTron products are available in around 1,000 retail outlets in India with a strong distribution network in number of states like Delhi-NCR, Punjab, Haryana, Uttar Pradesh, Uttarakhand, Telangana, Andhra Pradesh, Karnataka, etc. For the FY 19-20, we will work aggressively on expanding our wholesale distribution channel to reach out the offline retail consumers. At the same time, we are also working on making PTron a global brand. Currently, we are present in countries like USA, Hong Kong, Israel, Indonesia, Italy and Canada.

Que 8 – What are the criteria that a business must fulfill to be added to your sales network? Are you open to adding more people in your business channels? If yes, which regions of India?

AK – We look for three ‘I’s- Infra, intent, and interest. This is the basic thumb rule we follow to partner with a distributor. It very important for the brand PTron to work with like-minded people and in right territories. Currently, PTron has distributors in a number of states and we are aggressively working towards appointing new distributors in western and eastern parts of India.

Que 9 – Why should a retailer, distributor or a re-seller join your network? What’s in the PTron house for them? What kind of margins do you offer?

AK – Let me share the bigger picture. In terms of value, 5 % to 15% of the Mobile accessories market is owned by category A (premium) brands catering between the price segment from INR 3,000 to 10,000 (taking earphones as an example). The major chunk of 50% belongs to accessories sold in grey market which are not reliable or fulfilled by warranty. There is an unaddressed gap in the offline and online market for products that are Branded & functional, which are perceived as value for money with warranty between the price range Rs 900 to Rs 1,200.

Pic Credits – PTron

PTron is aiming to capture this remaining market segment which is potentially the largest by volume and value. This is an opportunity for us and for a distributor. We ensure enough margins are offered to the distributors to create a win-win business opportunity.

Que 10 – What service model does PTron follow here? Is it door-to-door or servicing through brand stores?

AK – We offer 6 -12 months of replacement warranty on PTron products depending on the product category. Consumers who bought products over the counter can visit the stores with required documents to claim warranty. Otherwise, they can connect online with the information available on our website.

Que 11 – Do you think India can be the next hub of consumer electronics manufacturing? What are advantages it has and what does it need to improve on to achieve the same?

AK – Absolutely, India can become the next hub of consumer electronics manufacturing through the “Make in India” initiative. By doing this, we can have better control on the product quality and pricing. This will also generate huge job opportunities in India. However, we need to organize and strengthen local infrastructure, availability of raw material & machinery, and skilled human resources.

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