Photo Credit: Flipkart
MarQ, Flipkart's private label electronics and home appliances brand, recently launched its first laptop in India. The new Falkon Aerbook marks the company's foray into a very sensitive market, and one in which buyers have lots of choices from very established brands already. Even after launching home appliances, accessories, and many other kinds of devices, MarQ will have quite a challenge ahead of it. Of course, it doesn't hurt that Flipkart has thousands of visitors every day who will come across the product in search results.
The MarQ Falkon Aerbook is now on sale in India, priced at Rs. 39,990 with only one configuration option and no variants. Gadgets 360 sat down with Adarsh Menon, Head of Private Labels, Furnishings, and Electronics at Flipkart, who was visiting CES 2020 with a sample of the laptop fresh off the production line. We wanted to understand why and how the company decided to get into the laptops market, its strategy going forward, and how it plans to differentiate itself, amongst many other things.
We started with the most obvious questions: why did MarQ decide to get into the laptops market, and why now? As Menon said: “If you look at MarQ by Flipkart as a brand today, it has been active for a couple of years, and is present in every consumer electronics category including televisions, air conditioners, refrigerators, washing machines, microwave ovens, and home audio. In fact, the latest launches we've done have been water purifiers, air purifiers, and a TV media streaming device.”
He continued: “The brand today has the scale, the wings, and the customer traction to be able to command trust and credibility for a very high-involvement category like laptops. This is typically a category that customers research a lot. A laptop is a product that they keep at home for anywhere between five and eight years. That's why this product is getting launched now and not a year back. We wanted to get into many, many, many more categories and then finally get into something like PCs.”
That sounds like MarQ has had the ambition to get into this space for a long time, we remarked, and Menon said that was correct. We asked why, in that case, is the Falkon logo on the product more prominent than the MarQ name? “The ethos or the intention of MarQ is for it to be amongst India's most loved and trusted consumer electronics and consumer durables brands. If you look at our TVs for example we call them Innoview by MarQ . If you look at our AC range, we call it Insignia by MarQ, so this is Falkon by MarQ. What we've tried doing is keeping the umbrella band constant. It's trusted by Indians mostly in tier II, tier III, tier IV cities. We want that umbrella proposition to translate across all products, but absolutely, different products also have different requirements.
We were able to spend a little hands-on time with the Falkon Aerbook, and the conversation shifted to how it was designed and how MarQ's strategy around it was shaped. Menon proudly told us: “This is a thin and light form factor, it has a 13.3-inch full-HD screen. It's about 16.5mm thick and weighs 1.26kg. The other options are the big sort of fat boxes that still sell. That's why we're calling it Falkon Aerbook; because it's fast, it's thin, and it's sleek.”
How many models and variants will MarQ launch, we asked? “At this point, just this one” was Menon's reply. "It has a Core i5 processor with Windows 10. It will not have an HDD, it's a 256GB SSD. We're starting with this one SKU for now, though we will keep expanding the range as and when we think appropriate.”
That surprised us, so we asked Menon to elaborate on the strategy. He said “It's very much a continuation of what we do with the rest of our private brands. At the heart of the entire private brand strategy is the customer feedback that we get on the platform. Customers come and search, browse, and interact with products, and they leave reviews and ratings. We're talking about several tens or hundreds of millions of customer interaction touchpoints. All of that goes into an in-house engineering tool called Review Analyzer, which looks at all the feedback and tells us what customers are looking for. In the category of laptops, customers are increasingly looking for products which are sleeker, better-looking, and thinner, because more and more customers are on the move right now. And of course they want a product that doesn't burn a hole in their pocket, so we decided to launch a thin and light laptop.
In the category of laptops, customers are increasingly looking for products which are sleeker, better-looking, and thinner, because more and more customers are on the move right now.
We had to ask whether that kind of understanding of customer preferences and data analytics gave Flipkart the confidence to compete with the brands that sell large numbers of laptops on its platform. Menon agreed with that, saying “For us, it's tied to what customers are looking for, seeing where the gaps are at, and then bridging those gaps with our products. We believe that this entire form factor, which is thin and light, is very under-indexed and under-exploited. Over the last two-three years, demand for this form factor has shot up. There are more young working professionals, more women are working, so they want their PCs to be better looking and lighter. If you look at a market like China, thin and light is the predominant form factor, but in India, the share is much smaller.”
Menon continued: “I also believe that supply is not exactly what the customer wants. The customer wants a form factor like this [pointing to the Aerbook] with certain specs at a certain price point. If you look at the market today, that price point is not available, and that's what we're trying to plug.
That lines up with what we at Gadgets 360 have seen in the market – a lack of decently priced laptops with modern features that don't weigh too much, and a glut of larger, heavier models in the budget space. We asked Menon whether his research also showed this. “It's not research,” he replied. “Research is usually third-party, which means a cost gets added. It is also normally based on a sample; you never research the entire universe. And by the time the research is over, in some cases, the customer has moved on. This is unfiltered customer feedback that's coming to us real-time, at the universe level, not as a sample. So for us, 13.3 inches is a very, very sweet spot for screen size. 1.2 kg is really light, and it's a combination of performance and thin-and-light that customers today are looking for.
This is unfiltered customer feedback that's coming to us real-time, at the universe level, not as a sample.
We then asked another burning question – how will Flipkart balance promoting its own product and being fair to other brands who sell laptops through the marketplace? Menon was diplomatic in his answer: “Ultimately, it's the voice of the customer that's the loudest. We believe that given the size of the market, and given the fact that the next 200 million customers are now coming onto the Internet, there is enough and more demand for enough and more brands and price points. There'll be a lot of customers who will have very strong loyalty towards brand A or brand B. There could be a customer whose loyalty would be towards a certain form factor or a certain price point. So our objective is to provide customers what they're looking for, and that happens by having more choices of brands and products.”
So, is there any sort of commitment to neutrality, or will Flipkart always promote the Falkon Aerbook in search results, we asked? Menon said it all comes down to the site's algorithms and each individual customer's previous search behaviour. “The only commitment is to be completely hands-off and show customers what they want, and let customers choose what they want,” he asserted.
We still wanted to know more about the scale of MarQ's ambitions. We asked if the company has any specific targets in mind in terms of numbers of Aerbook units it wants to sell in the first year or so. Menon was dismissive of the whole idea of sales figures, saying “We've not gone much by those targets before. For us, the objective is to make sure that customers are happy with what they get, and if that happens, then many good things start happening. The product starts getting scale, we start getting scale benefits, costs come down, sellers start making more money, and then the prices come down further. That is the sort of virtuous cycle that we want to get to. The number or the units is always an outcome of that. That's the way we run the private brand business, with over 300 categories.”
Speaking of scale and pricing, we asked about MarQ's Make in India strategy. Menon surprised us with his answer: “No, it is not made or assembled in India, but it is made at one of the best factories globally, with absolutely world-class technology and quality practices. We've tied up with the two biggest ecosystem partners, Intel and Microsoft. They have been very closely involved with the conceptualisation and design of this product from scratch. The factories that we work with have been endorsed by Intel and Microsoft as well.”
Menon declined to name the company's manufacturing partner, but continued: “Generally, we are slowly building towards Make in India. There is no roadmap to say that today it is country A, tomorrow it's going to be India. It's all about figuring out where the best partner in the ecosystem is, and what we've seen for this particular case is that the best partner is outside India. We've evaluated the cost, quality, and reliability which are extremely critical. Cost is just one of the factors, but a very important one.”
The final point that we had time to address was after-sales service. Obviously, this is a huge concern for laptop buyers. We asked what sort of infrastructure MarQ has in place to help buyers, troubleshoot problems, and service or replace units. Menon agreed that this is a super relevant and important issue. “We have an in-house company called Jeeves which specialises in after-sales service. Customers want lifelong care, and if something goes wrong they want to know who to call. Jeeves has a network of 350 service centres across the country. Customers can access them 24/7. You're able to bring the machine to the service centre or if you want somebody to come home and fix it for you, they will do that as well."
(Some responses have been edited slightly for language and continuity.)