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Global chipset shortage is a result of several macroeconomic factors: CEO realme India

Smartphone and tech company, ‘realme’ on Wednesday said it has clocked a sale value of ₹3,500 crore across all channels during the festive sales between October 2 and October 10.

According to Madhav Sheth, Vice President, realme and Chief Executive Officer, realme India, Europe & Latin America, the company is targeting to be amongst the top three smartphone brands in the country even as it focuses on offline expansion.

In an interview to BusinessLine, Sheth talks about how the company managed to “plan in advance” on chip shortages and is working with “dedicated chip makers”; price rise due to supply constraints; and sales trends for calendar year 2021. Excerpts:

1) Chip shortages continue to be an issue for the industry. How is realme dealing with it?
The global chipset shortage is a result of several macroeconomic factors. Suspension in production, massive demand in the work from home era, disruptions in logistics have impacted the supply chain considerably. As production and distribution facilities open up gradually and supply resumes, we anticipate that the chipset shortage will take some time to ease until Q2 of 2022.

Despite the shortage of processors, memory, display, and other components that have been affecting the industry globally; we anticipated such a crisis and made adjustments. We are dedicatedly working with mainstream chipmakers to keep ahead of the curve; collaborating with new burgeoning suppliers for components, including processors. In India, realme brought in trendsetting technologies – introducing 5G processors and so on. We have enough stock to meet the surge in demand.

2) Has chip shortages led to price rise in devices and if yes, how much?
The industry had tried its best to absorb the pricing but finally everyone had to increase market operating prices of select products. We have tried to keep the cost in control but because of supply constraints have led to a 2-6 per cent price hike.

3) What is the outlook for CY21 in terms of mobile sales?
realme aims to be amongst the top three smartphone brands and the number one online brand clocking sales to the tune of 25-30 million devices this year. The aim is to be the leader of 5G (devices) and ramp up the portfolio in India and globally. As per recent Counterpoint (research firm) data, we are India’s number one 5G brand in Q2 (April to June) CY21. We were also the fastest brand to reach 50 million cumulative smartphone shipments in India.

4) As realme enters into new verticals like tablet PCs and laptops, what is the outlook for these new categories in terms of sales in India?
We are creating the realme TechLife ecosystem with our 1+5+T strategy through smartphones, smart TVs, smart audio, wearables, laptops, tablet PCs and other gadgets. We have entered the laptop, tablet and other categories as part of our 1+5+T strategy with the launch of realme Book (Slim), realme pad, etc.

Based on the customer response on AIOT (artificial intelligence of things) products, we plan to continue introducing more into the market. If you notice, we expanded our AIOT portfolio into realme TechLife Robot vacuum cleaner, and today we came up with the 4K Smart Google TV Stick.

In terms of responses, realme laptops registered 3,000 unit (of sales) in less than 10 mins of its first sale and the realme Pad has been amongst the fastest selling tablet PCs.

5) How have offline expansion plans materialised so far, especially post-Covid-disruptions due to localised lockdowns?
In 2021, we had plans to open a few flagship stores and 300-500 exclusive smart stores. Mainline expansion is essential for long-term growth and sustainability. And our target is to have at least 300 such exclusive stores by 2021 and expand it to 1,000+ stores by 2022. We have also been expanding offline into tier-II and tier-III cities. The first realme flagship store will come up in Gujarat. The Hindu BusinessLine

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