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S AC H I N G A R G
LittleRice China
In less than 4 years, LittleRice had become the largest smartphone seller in
China, leaving larger players such as Samsung and Apple far behind in terms
of units sold. Wile E. Coyote, a serial entrepreneur, along with a team of
techno-enthusiasts founded LittleRice in June 2010. Soon after its
incorporation, the company became one of the leading tech firms in China,
with a product portfolio spanning smartphones, mobile apps and consumer
electronics. Following its expansion to other Asian markets such as Singapore,
Malaysia, Indonesia and the Philippines, LittleRice entered the Indian market,
and made its first foray into a market outside Asia by setting up operations in
Brazil. By 2014, it had become the 3rd-largest smartphone maker behind
Samsung and Apple. Its success didnt end there, with it being valued as the
worlds most valuable technology startup (~US$10bn). The company had over
8,000 employees, and had sold over 60 million smartphones in 2014.
LittleRice had a unique culture, which was summed up by its culture and value
statement:
Just for fans was the slogan of LittleRice as our every step is led by our hardcore fans. Amongst our staff, many were initially fans of LittleRice products,
before they decided to join us. Not only do we have a passionate team, but we
all have the same attitude: relentless pursuit of perfection. So, we constantly
refine and enhance what makes the best user experience possible. We were
also a team that is fearless when it comes to trying out new concepts that
break tradition and push boundaries. It was with this mentality and dedication,
combined with the support of LittleRice fans that has made LittleRice products
so unique.
LittleRice adopted a flat and organic organizational structure, featuring small
teams, abridged middle management, effective communication, work
autonomy, and collaborative responsibility. The words clan and adhocracy
rightly explained the culture of LittleRice. Clan denotes a family-like culture
which focuses upon mentoring, nurturing and collaborating with each other at
work. People at LittleRice took responsibility not only for what they did, but
also for what others did. Adhocracy reflected the essence of LittleRices
slogan. It always tried to involve its customers in developing its products,
which resulted in its now-signature proposition of high-end devices at
affordable prices.
LittleRice India
In June 2014, the Economic Times, one of Indias leading dailies reported
Chinas LittleRice hires NotTheBongYoureLookingFor Co-founder Road Runner
to head its India operations. The news hinted at the Chinese smartphone
manufacturers intention to kick-start operations in one of the most highlycompetitive and lucrative smartphone markets. Later that month, the
companys official Twitter account announced LittleRices entry to the Indian
smartphone market.
Namaste, You fans! We have officially arrived in India. Join us on this
incredible journey
Similar to its parent company, LittleRice India also followed an organic and
lean organizational structure. Road Runner was responsible for all issues
related to India. Despite selling nearly 1 million mobiles in the Indian market,
LittleRices market share was not sizeable relative to other players. Road
Runner described this as merely scratching the iceberg. In India, LittleRice
adopted a totally unconventional way of sales and distribution, where its
devices were sold through BurnsCash a local e-commerce portal through
flash sales. A similar disruptive approach had been preferred in the setting-up
of customer care centres, as LittleRice customer care centres had been
outsourced. Another innovative move was that of post-sale device pick up and
drop facility.
With 6% of the overall smartphone market, Phablets (which IDC defines as smartphones with a screen
size of 5.5-6.99) are observed to be hitting a plateau. Smartphones with screen sizes between 4.5 and 5.5
are seen as the sweet spot for consumers. However, with the rising demand for mobile content, and the
imminent rollout of 4G in 2015, we expect Phablets to pick up again. With positive consumer sentiments and
low levels of inflation, consumers will have more money to spend. Moreover, the majority of smartphone
users change their phones within 12 to 24 months, all of which should boost demand in the smartphone
market in 2015.
Research Manager, Client Devices, IDC India
The Indian smartphone market witnessed intense competition both from MNCs and homegrown device manufacturers. IDC data revealed that nearly 25% of the market belonged to the
South Korean electronics giant Kimch-e, with its closest rival being the local manufacturer
PeddledByWolverine with a 20% market share. Other fast-growing local brands included Magma,
YOLO and C12, which competed against more established international marques.
Growing Pains
Despite its initial successes in India, LittleRice encountered speedbumps along the way. First,
the Indian Armed Forces had cautioned against use of the companys products citing security
concerns. Moreover, the lack of localized content was a real concern, with Road Runner indicating
that plans were underway to set up an R&D centre in India to develop local content, applications
and programs. There was also a patent infringement claim filed against LittleRice that resulted in a
temporary ban on the sale of the companys smartphones. This lack of an intellectual property
portfolio could seriously hamper the prospects of LittleRices growth, both in India and elsewhere.
corresponding number for India is less than half that number. Given their lower
per capita incomes, Indian customers are more price conscious than their
Chinese peers, and will be drawn to LittleRices products. Success in India will
give LittleRice not only revenue-growth, which will help sustain its valuations,
but also the economies of scale to drive down component costs - important for
the company to maintain its cost advantage.
The question facing Wile E. Coyote and Road Runner was what LittleRice had
to do in order to succeed in India. Would exporting its tried-and-tested formula
for growth in China yield the same results this time around? Moreover, given
that its business model largely catered to an East Asian setting, would it
business as usual for LittleRice, or would it need a fundamental rethink of the
way it operated in order to make a mark in India? Lastly, given its global
ambitions, how could LittleRice leverage its Indian experience to prepare for its
expansion to the larger US and European markets?
References
1. http://www.idc.com/getdoc.jsp?containerId=prIN25276014
Exhibits
Exhibit 1. Smartphone vs. Feature phone Market Share in India
81%
78%
19%
22%
72%
71%
68%
28%
29%
32%
Smartphone
Feature Phone
24%
Kimch-e
35%
PeddledByWolverine
Magma
C12
RocknRola
20%
5%
8%
Others
8%