Tech Talkies

[Tech Talkies] P Sanjeev, Huawei India: “We should be number one in the smartphone segment!”

The accidental sales wiz!

It is the eyes that tell you his mood. Generally, they twinkle with good humor. They tend to look slightly downwards when he is recalling information to make a point. They are almost always steady and close to hypnotic when he talks. Oh, and if they frown, it is difficult to resist the temptation to head for cover. They widen in surprise, however, when we ask him if he is moody!

So I am the same at home and office,” he says. “No difference, no multi-personality.

We look at him. A hint of a smile sneaks across his face.

Well, most of the times I try to be calm and cool, but offline business can really stress you up to an extent that you sometimes lose your cool…

We continue looking at him, and he finally bursts out laughing.

Oh all right! Yeah, maybe a little strong on temper. I admit.

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It is a big laugh. Hardly surprising. For, P Sanjeev is a big man. And not just in the physical sense. He, today, is vice-president, sales, Consumer Business Group of Huawei India, and is for many people, the face of the Chinese company in India, as well as its brand, Honor – a consequence of being on stage for many launches and giving statements to the press.

And it was not at all planned, according to him.

“I am actually an IT engineer”

It is an accident that I got into telecom,” admits P Sanjeev. It seems to have been a happy accident if the smile that accompanies the statement is any evidence. “I am actually an IT engineer,” he says. And he goes right ahead and answers our unasked query: “Why IT? It was so prevalent. You get into IT, you land up in the US, you get better process at the US and everything is so green, everyone wants to go to the US. I was in the same line, moving slowly towards becoming a software engineer.

It was a friend who changed his perspective. “This friend of mine calls me from Malaysia saying that the money is elsewhere, you need to get into interesting stuff like selling VSAT,” Sanjeev recalls.

The sales cycle that started with a…cycle!

Why did his particular friend have such faith in Sanjeev’s abilities in sales? Well, evidently, it was because Sanjeev had shown great marketing flair while selling a bicycle in school! “There was this guy who had actually seen a paper ad about my cycle (a Hero cycle),” he recalls. “He came home, he sat on the cycle, he took a ride and then he said, ‘no I am not buying this.’ I got very angry and I said, ‘you rode it, you better buy it.’

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He pauses and laughs at the memory. “I apparently gave him a discount because my dad said ‘you can’t sell it for less than Rs 1200.’ And for Rs 900 it was done. Still, my dad said, ‘you need to get into sales.’

The sales cycle was thus well and truly started. Pun thoroughly intended. On his friend’s advice, Sanjeev went to Malaysia. “I ended up being the business development manager for VSAT solutions. Selling broadband over VSAT for Petronas. That is how I got into telecommunication. I actually was a sales guy.” He pauses, and adds, with a glimmer of pride, “I could sell anything at that time!

Things moved fast from there. He moved to Hong Kong, and then was entrusted the task of expanding business in South Asia when, to use his own words “This animal called Huawei suddenly came up and killed the whole VSAT business and my customer said, ‘your antennas costs as much as a Ferrari!’

He laughs again. Unlike some people, he is as much of a laugher than a smiler. “At that time when we used to go sell VSAT, we used to go wearing a tuxedo – after all, we were selling each antenna that costs as much as a Ferrari. But then this customer tells me, ‘Hey Sanjeev, we are sorry to tell you but we will not buy VSAT anymore.’ I asked ‘why’, and he said, ‘there is this company called Huawei that has CDMA technology and its damn cheap.’

Hello, Huawei

Interestingly enough, a customer’s recommendation actually got him into Huawei. “This was like 2004, thirteen years ago,” Sanjeev says. “At that time Huawei actually sold devices because it wanted to bring in a new technology. CDMA was a new technology, so Huawei sold its fixed wireless phones (FWPs), data cards, etc., because otherwise how do you sell your technology? You have you a pipe, you need to sell devices.

Of course, it did not take Huawei long to realize that Sanjeev’s real strength lay in sales.

Huawei realized that I am more of a sales guy,” he says. “And they said, ‘you get into consumer business.’ So, I entered into selling networks and very soon when this consumer business unit was getting shaped up, Huawei was doing pretty well in consumer devices, and the only one thing I remember from that time and today is that Huawei always makes fantastic quality and Huawei understands the customers really well. I mean even when we sold FWPs, we bought local languages – Hindi and Tamil – into it, which nobody would have thought of. That is how we started off Huawei India by selling CDMA phones, FWPs, data cards, and so on.

Just how well he did is borne out by a rack of breakthrough awards at his home. That cycle did trigger off one heck of a ride.

For he is a ‘Honor’-able man

In India, Sanjeev is associated as much with Huawei’s sister brand, Honor, as with Huawei. Asked about the inception of the brand, he explains: “Honor was born as a contender for the e-commerce boom. When this entire e-commerce boom came up in China, 2012-2013, onwards, Honor was actually created and crafted, as an e-commerce brand. It meant ‘for the brave,’ basically for millennials. Huawei stood for ‘to make it possible,’ technology, reaching the heights of technology, keeping on innovating.

“…in China, Honor is number one. And our closest friend who actually did a wonderful job in creating this so-called e-commerce market is declining by 20 percent year on year”

He pauses and takes a jab at one of the brand’s rivals. “You know, in China, Honor is number one. And our closest friend who actually did a wonderful job in creating this so-called e-commerce market is declining by 20 percent year on year.” Before we can say something, he laughs and adds, “Good for them, they are doing great in India.

Ask him what makes Honor tick, and his answer falls on slightly general lines. “Probably, Honor understood that for long-term success, you need not just have to play the price war, you also have to be innovative. You need to bring in more features. You need to be consistent. I think that worked out really well for Honor in China and also in 74 other countries. Honor is doing pretty well.

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Ever the sales wiz, he starts doodling on a pad, quoting figures that clearly seem to have permanent resident in his head. “If you look at products starting from Rs. 6,000-7,000 running up to Rs. 30,000, you will have a good spread or run. Huawei’s flagship phones are primarily above Rs. 30,000. Huawei has done pretty well globally. If I look at Gfk’s figures of North Eastern Europe, I can see we already have 17.5 percent market share. If I look at western Europe, Germany, France, UK I can see 10+ percent market share. The P9 sold 12 million odd phones. If you look at also other markets like the Middle East or even other countries like Italy, we are 22 percent.

He pauses and then points out a statistical oddity: “So we have 20 percent market share in 20 countries and 15 per cent market share in 15 countries. Interesting right?

The battle for the Indian market: “We should be number one!”

The international figures are indeed impressive, but what about India, we ask.

it is time for us now to be amongst the top three brands here.

The real strategy and real effort for us actually started off somewhere in July last year,” Sanjeev reveals. “Prior to that, in 2014, it was one of the e-commerce partners that came to us, and said that Honor could be a great potential partner for them, convinced us to bring one or two devices in India and we came in as an e-commerce brand. It was the Holly series and Honor 5x. But it was very clear – we were not just there to discount the product, we were there to sell it at the right price. Not extraordinary marketing, to load off the price on the consumer. We were happy because we sold a million phones and we have got a million happy customers.

However, things changed from there onwards. “Our aspirations went up from July last year when we said that, ‘it is time for us now to be amongst the top three brands here.’ We don’t shy away when we talk inside the company that we should even be the number one in the smartphone segment.

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Noticing our slightly incredulous glances at this statement, he taps the pencil on the notepad, and repeats with a smile that has more armor than amiability in it: “We don’t shy away. We think we can take it there. We have a full portfolio to do that. We made a lot of changes in our organizations, in our team, in our strategies to take us there. Huawei and Honor have shaped up into a very large organization that can take on the task. Take the sales function – the leadership team has now more than 200 years of experience. We have picked up regional directors to head North, East, South, West. They come in from all top brands. Below them is a network of seventeen state heads. Below there is a team of almost close to a thousand area sales managers and territory sales managers.

He pauses to let the numbers sink in and then continues: “So we have a huge organization. And we have set up close to 500 micro distributors across the country – India has 650-odd districts. We are focused more on building up the offline business. We can come into the top three of the smartphone business only if we go for a 10 percent market share.

Taking the battle offline: “Offline will be a great bid for us”

But why the need to go offline in such a big way, we point out. After all, he had himself said that Honor had been a brand for e-commerce.

The doodling on the pad starts again, and by now we know that the figures will come. Rattled off with seeming effortlessness. Sure enough, they do.

Now the online business in 30 percent and the offline business is 70 percent,” Sanjeev explains. “So if we were to do, whatever we wanted to do in this 30 percent segment, we would have never gotten into the top three. There has been a heavy growth in the Rs 10,000 – 15,000 segment in offline recently. And this has happened after September.

40 percent of business in retail is coming from EMIs and this one requires touch and feel

And the demonetization move (in which a number of currency notes were withdrawn by the Government in late 2016) had a role to play too. “A trend we are seeing is, soon after the demonetization, what cash on delivery did to e-commerce, we can see EMI doing to the customers to upgrade to a higher end device,” he says. “As I speak to all retailers, I can see that. 40 percent of their business in this segment is coming from EMIs and this one requires touch and feel. So you need retail, you need to talk about it. Now the other segment that we are seeing increasing is the Rs 25,000 – 30,000. That is great news. I was very impressed on seeing that when I take the segment of Rs 5,000-10,000, it is just 18 per cent, and when I take Rs 15,000-20,000, it is almost 13-14 percent. The gap is narrowing. I am seeing now the figure looking more like the Chinese. In the past, it used to be more than 80 per cent under Rs 10,000, and very small numbers as price go up, whereas in China you see equal numbers in different buckets. Now our Gfk figures are looking very similar to the Chinese ones!

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The good part is, Huawei’s advantage comes when we have to demonstrate chipsets and software. Huawei spent a great deal to provide developers WITH tools to solve the problems of Android customers. We called it Emotional UI5, EMUI5. We have 20 patents. What we did is basically is a handshake between the Kirin processor and the EMUI. The promise is that even if you load up 10,000 plus contacts, it does not slow down. We are trying to position ourselves, either through Honor brand or Huawei brand as something unique in the Android segment. We are going beyond the 3 GB RAM + 32 GB, 4 GB RAM + 64 GB, 13 megapixel+12 megapixel, 5 megapixel+8 megapixel, and looking to address the pain points of our customers. Software, battery performance, great quality – packaging all this into a great price. To demonstrate this, offline will be a great bid for us.

If you choose the right factory, the right processes, India can give a really good manufacturing business

Of course, local manufacturing plays a key role in Huawei’s ambitions in India. “It is too early to declare but we have a decent aspiration,” Sanjeev says, and immediately elaborates. “You know aspirations never go less than a million. So aspirations are aspirations. We need to make it happen. The good thing is that we took some time to launch our local production after we started off with the Holly 3s. We are very impressed – India could be a great manufacturing house. It was really a myth that we may have issues, we may have quality problems. I don’t think so. If you choose the right factory, the right processes, India can give a really good manufacturing business. The only challenge here is that since you do not have most of the components locally produced, the inventory risk is high. Because once you bring the stock down here, you have to sell. It is a one-way path. You can’t share it with other products. You lose a little bit of flexibility in all of that but quality wise? Absolutely no problems. We are churning our really good phones out of our Indian factories. The Holly 3 was our first local production. The Honor 6X, which has been doing very well, will move to our local production soon.

“We could not do that. We would not do that!”

And he clearly feels that he has an ace up his sleeve in terms of product quality. “Some of the other offline brands – I was surprised,” he says, shaking his head. His voice goes up in outrage as he ticks points off the competition: “Rs 15,000-20,000 phones that are selling 2 lakh numbers a month did not have a full HD screen. We think it is criminal. We could not do that. We would not do that. We would give the customer what they deserve. Definitely. We realized that in that segment, people are using age-old processors. Come on! And when the customers find out, they are going to be so disappointed.

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He takes a breath and then goes on in a quieter tone. “So, Huawei is taking care of all of this. When we launch phones in this segment we will be ensuring the consumer does not feel like a fool because he or she bought this phone. The R&D in Bangalore has already churned out more than 45 releases, EMUI updates, with 16 local languages support. We have also opened exclusive service centers – there’s a beautiful one in Lajpat Nagar in Delhi, complete with imported furniture, We are trying to tick all the boxes, to ensure that the basic foundation is built up as a big brand.

He smiles and adds a note of warning for the competition: “I can definitely say that right now the incumbents, in this segment in offline will, at least product-wise, feel the heat.” And he clearly sees the smartphone segment as a key challenge. “Our other businesses are doing fantastic. Data cards are is doing fantastic. For more than the last decade, we are ranking number one – we have 70 percent of the market share. I don’t want to talk about that. Most of you recognize us through data cards,” he says.

The offline challenge: “Huge. Humungous. Expensive!”

Sanjeev, however, is under no illusions about how difficult breaking into offline retail into India will be.

Huge. Humongous,” he says, rolling his eyes at the thought. “Huge challenge and very expensive. Online is very easy, to be honest. I would be bold enough to say if we really wanted to make 30- 40 percent in the online market share, all that Honor had to is to slash down the pricing. That’s it. Nothing more.

But in offline, there are lots of details. Offline retailers are moving on to becoming SOTs – self-organized traders. So basically they are changing their style of working. They are installing Tally, they are getting ready for the new general sales tax (GST), they are getting into consortiums or groups or associations, to train themselves… so the retailers are getting very organized. Now to win the mind share of the retailers, there are only two ways: one is to tell them the short term game, that is, money,” he shakes his head dismissively and moves on to what he thinks is the real play: “The other is to tell them the long term game that, ‘hey you are an entrepreneur, if you want your shop to be running for the next ten years here, please choose long-term brands. We have a long-term strategy.’ So this is the big battle. That is why you need a huge team on the ground, which is qualified enough to continuously groom them and bring them up. It is not easy. The battle is tough. The solution to this battle looks like money and that means a lot of money and of course, execution, control and quality.

But the good part for us is that we have the products that are great. Right specced, right priced, right quality. In fact, the complaint that I get from Lajpat Nagar exclusive center is ‘please do something, sir. The call volume is too low.’ So that is why we are confident. We can always expand in 180 districts because our call volumes are going to be low. Even we have a service dark patch we can do a pickup and drop. That is the final solution to it. So, challenges are hard but the opportunity is really bright,” he stresses.

“You have to fight the battle at the retail shop”

Of course, given the kind of presence and head start the competition has, Sanjeev knows that Huawei and Honor have their task cut out to make their presence felt in India’s vast retail chain.

Retail is retail. You have to fight the battle at the retail shop,” he says. “Training in-shop promoters, even giving them cool looking T-shirts, giving them the equipment to communicate with the consumer, telling them our advantages. Takes a lot of effort. But on the other side, consumers are getting smarter and smarter by the day. Even offline customers are very sensitive to what specs they are buying. There is more awareness. So the customer comes into the shop and the promoter says, ‘Hey, you buy this phone, it never slows down. This is my assurance.’ We need to be able to put that bet on the table. We are trying to concentrate on what is important for the consumer rather than only showing visibility.

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So, will there be no high-profile marketing from Huawei or Honor? Sanjeev shakes his head impatiently at the assumption. “Of course, we will have visibility,” he says. “We are building that up. It is required because what you see is what you remember. You can’t just ignore that. But I also see an opportunity in that. The opportunity that I see is that the consumer is now not sticking to the incumbent brand. Once he or she comes out and is open to buying new brands, the conversion power of Huawei could be even more because we have great products. All the battle will move to the retail front. You can’t surprise anything more in online now. Everything is there. But in offline, you can because the customers are not really getting what they deserve for the price they are paying. I think we will change that. We will change that.

Core strength: Fastest Android, local R&D

And what does he think is going to make his brand stand out from the competition? Surprisingly, rather than speak of specs and design, as many others do, Sanjeev actually heads to the soft side of matters. “I think, the first and foremost core strength is the fastest Android,” he says even before we have finished the query. “Very very important and excellent battery performance supported by a great quality. Now how do you define quality? Of course, we speak about the failure rates, we talk about the support that we give, we also talk about the software updates that we give. The other brands do not have any R&D for software updates continuously. But those things do matter for the consumer. He or she says ‘I want Android Nougat’ – we can provide that because we can do an OTP, we have local R&D.

There was a situation where a portion of our customers of one of the products complained to our service centers – we got around 16 complaints – saying a particular feature did not work. We sent it to the R&D because now there is a huge follow up on the tracker, and the Bangalore R&D was able to resolve that in 48 hours. We put an update so that the remaining customers were also supported. These kinds of things define your support to the consumer. The consumer is not lost.

“Honor 8 was a real darling”…and at home too!

And which of their products have been their sales stars? The answer is again quick. The man knows his statistics. “Honor 8. We got 7 percent market share in Rs 25,000-30,000 market segment. Honor 8 was a real darling.” But its biggest triumph was evidently winning over his wife, who was a Galaxy Note user. Oh, and his mother in law too.

“… mother-in-law was an Apple fan, continuously insulting me every single time I saw her with an iPhone”

She tried to prove that I am not a good sales guy,” Sanjeev says with a laugh. “She would not move from the Note series. One Note to the other Note to another Note. And every time I went home, I would feel insulted. Then she called me and said, ‘This new pink Honor 8? I want that.’ I was so excited that I called the distributor and said, ‘Send it right now. I will give you the cheque.’ And she moved from Samsung to Honor 8. And mother-in-law was an Apple fan, continuously insulting me every single time I saw her with an iPhone. She also has moved to an Honor 8. So Honor 8 at home as well outside has really done well.

And if the Honor 8 has scored in the higher price segment, the Holly 3 has done wonderfully well in the budget one. “It was really fantastic,” says Sanjeev. “Holly 3 has a great demand. Almost 28 percent of our demand comes from Holly 3. And we are especially very happy because it is made in India. And we want to ensure that the sell out is good otherwise thousands of people out there will not have jobs to do. So, Holly 3 and Honor 8 have been our flag hoisters. And supporting that is Holly 2 Plus. Holly 2 Plus for a simple reason, in a sub – Rs 9000 phone, you get a 4000 mAh battery. It did well. So another 25 percent of our sales comes from this. So these three are the bestsellers in offline. Online? Obviously Honor 6X.

But these sales stars notwithstanding, Sanjeev knows there is a lot that needs to be done. “We have so much to do in Honor itself,” he points out. “If you look at Delhi, we have 1200 shops now. But we need to work on our visibility. We need to put our basics in place.

Huawei phones in India: en route, but in no tearing hurry

What of the Huawei brand’s arrival, we ask, and of more phones from the brand (the P9 is the only high profile device in the smartphone market with Huawei branding). “We think it will be easier, the more we delay its arrival,” he says. “The reason? First, we are getting very popular globally, and we are getting known for some reason. It is only going to be easier to sell a Huawei device as time passes. So we want to first build up Honor. But we definitely have a plan. When we bring a Huawei product, we want it to be with a lot of fanfare. A lot of red carpet. Roses. We don’t want to bring Huawei and say, ‘Hey, Huawei is here now.’ We are globally number 3. And we are challenging for number 1.

“The market is tough. So yes, the days are long for us. And we are enjoying it.”

It is an ambition that takes a pretty heavy toll of his regular work schedule. “Well, since I am enjoying the work, it is actually very long,” he says, speaking of a typical work day. “We have days when we suddenly finish the day at midnight and then say ‘now let’s have a meeting.’ Then we meet at 1:30 am. I think because of the early days and so much to do, we ourselves are working a lot. There are so many details to be followed. We have set ourselves a very heavy target to achieve. The market is tough. So yes, the days are long for us. And we are enjoying it. Lots of working dinners. Lot of meetings. Lots of market visits.

The style of work is pretty flexible and at times even unpredictable. “We sit and talk, we say ‘This product is not selling can you tell me the reason?’ No one gives me the answer,” he pauses and then leans forward. “Suddenly we pick up the car and move to the market. So that is how it happens. Then you go to the market then you find out the reason. Almost six hours gone.

Beyond work: Cars, biryani and music without lyrics!

What does he like to do when not in Huawei or Honor mode?

“I am an Audi fan. So I spend a little money on cars. My wife doesn’t like it.”

My second love is cars,” he says. “If I was not selling phones, I would sell cars. I love cars. I was always thinking of selling bikes or cars. Somehow I landed up with selling mobile phones. I drive. I enjoy driving and driving really fast.” He notices our expressions and qualifies his statement: “But of course, on the right roads, not crazy. I drove all the way from Delhi to Bangalore in 48 hours. I am an Audi fan. So I spend a little money on cars. My wife doesn’t like it. She says ‘You are a depreciating property and you are spending on a depreciating property. Spend on an appreciating property.’ We have this fight always. I just say: ‘You agree that I am depreciating, so before I depreciate more let me just enjoy while I can.’ So if I get some time on a Saturday, don’t be surprised if I am at NOIDA at the track with my son buckled up and both of us screaming. So that is what I do when I am free. My son loves reading but I love driving cars.”

He also loves his Biryani, a dish made with seasoned rice and meat, fish and vegetables, depending on the variety one chooses. And he loves all kinds of Biryani. “Lucknowi, Hyderabadi, all kinds,” he says. “Because Biryani is king’s food. It is said to be a luxury, and somehow I got the perception that eating Biryani makes me feel like a king. I enjoy it. The flavors are very rich. I am not talking about this Biryani from just one of these restaurants. You go to a good Hotel, order for a specialty Biryani. That’s great.

What about music? “I am doing a lot of injustice,” he confesses. “I never listen to the lyrics. I just love to listen to really literally to the music, not to the song. I love music. I also have a great music system. But it’s the beats that I enjoy, sadly. So it is really music rather than the song or the lyrics. The stupidest of the songs, you give it to me and I’ll enjoy it.

He would. P Sanjeev seems to have a knack of enjoying things. Even the battle that he is waging against a well-entrenched competition both online and offline. Given his track record, it would take a certain amount of courage to bet against his pulling off a marketing coup, be it for Honor or for the forthcoming Huawei smartphone range. For while he loves his Biryani and cars, P Sanjeev is happiest in marketing mode.

Just ask the chap who bought that Hero cycle from him so many years ago…