India and SAARC,
How is the flash memory market faring in India? What has been the role of SanDisk in it?
SanDisk has been a pioneer in the flash memory technology, and we have more than 1,400 patents worldwide. We invented the first flash memory card way back in 1995. It is because of this technology that the digital industry has come to life and is in a revolutionizing state. All the devices that support our products are on an increase. The flash memory technology has enabled all the small devices to come with higher capacities of memory. Now, a phone can carry a 32GB memory, which would not have been possible otherwise. Also, the applications that come loaded in these devices have been possible only because of these memory cards.
A major part of our business comes from the mobile phone industry, with camera forming the other important part. SanDisk has been a major supplier of memory cards to all the camera manufacturers globally. We also had recently launched the 128GB CompactFlash Card (CF Card), which is the highest capacity card ever. The USB business is another category that SanDisk caters to. We have a very exciting line of USBs and have recently launched two new products carrying two new interesting features. One is the SecureAccess software that protects files against unauthorized access by creating an encrypted, password-protected folder on the USB drive and the other is the online storage. The old pen drives would also start having these features.
How do the storage requirements in the country differ from that globally?
Storage is something which is on a rise in India. It is catching up really fast with the countries of America and Europe. If you look at the PC and the computing market today, the highest growth of storage is happening in the smartphone, iPad and the tablet categories. Interestingly, all these categories do not use external storage device but use internal storage capacity. These are the categories that will influence the growth of storage in the next ten years in the country. So, SanDisk will put the bet on internal storage, the area where the maximum growth is taking place.
What makes SanDisk such a powerful brand?
SanDisk is a premium brand. We are the inventors and co-inventors of many memory cards and pen drives. If you analyze our philosophy, we are an innovation-driven company and this is what keeps us always at the forefront. We are also very particular with the quality of our products. We design our own controllers and this along with the raw flash (we have a joint collaboration with Toshiba for this) we come out with one of the best memory products in the industry. We heavily depend on R&D for designing our products and we spend close to 10 per cent of our revenue on all the research that goes behind the making of our products. Our R&D facility in Bangalore works closely with the global team in this regard.
We have three different levels of products in all our product lines. One is the base level product which is the mass level product, the ultra range and then the extreme range. Being a channel- friendly company, we do conduct training programmes for our partners and have been doing this right from day one. We also do a lot of marketing activities and this is why we have been very successful in India as a brand.
How have you structured your distribution network in the country? What kind of marketing tools do you employ to promote your products?
We have three national distributors - HCL, Ingram Micro and Rashi Peripherals. After buying products from us, these distributors sell it to the city distributors, who further down the line sell them to the retailers. We manage the first two levels directly, but for the third level we have a sales team who goes out in the market to do all kinds of merchandising, training and retail activities.
We design our consumer campaigns around a simple philosophy. We always try to create a pull in all our campaigns that would entice more and more customers to our products. At the same time, we push the channel by encouraging a lot of activities for them. We also are well represented in all the LFRs. We have a concept called memory centre in these LFRs which is a shop-in-shop kind of a thing and it exhibits all our SanDisk products. We have around 10,000 retail outlets functioning in the country.
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