“We are trying to provide every market segment with a good product at a reasonable price”

AURORA: You have worked at several prominent organisations prior to joining Sparx. How has your career in mobile technology progressed?

ZESHAN QURESHI: My professional life, which spans nearly 22 years, has revolved around mobile technology and smart gadgets. I am very passionate about them and about bringing new technologies to Pakistan, localisation and job creation. I am a communication systems engineer, and I joined Samsung in 2003 when it was an emerging brand and not yet a Fortune 500 company. At Samsung, I had the opportunity to work in several countries including South Korea, Egypt, Turkey, Dubai and Pakistan and I eventually became the country head for Pakistan and Afghanistan. 

A: Why did you leave Samsung to join QMobile?

ZQ: Leaving Samsung for QMobile as a founding member was a very tough decision because by that time in 2010, Samsung was a Fortune 500 company and Qmobile a start-up, and the concept of start-ups was not as prevalent as it is today. However, at the time, although Nokia was a dominant player, their market share was diminishing. I realised that as Nokia would increasingly be focusing on Microsoft-related products, this would leave a vacuum for feature phones which QMobile was concentrating on. When QMobile started, the total market size in Pakistan was approximately 600,000 mobile units per month. We set our two-year target at one million phones. Within two years, the market grew to 1.8 million units and of that, QMobile was selling 1.1 to 1.2 million units and had captured about 72% of the market share. Qmobile was therefore a huge success.

A: To what do you attribute to QMobile’s success?

ZQ: We were able to customise phones according to the consumers’ needs at economical prices, and we were very agile, efficient and intelligent with our marketing spend. QMobile became a household name in two years’ time and one of the factors that contributed to this success was a campaign I worked on featuring Kareena Kapoor. However, I wanted to work more on localisation, and the opportunity came to work on this aspect with Haier which I joined in 2014 as their CEO for Pakistan and Afghanistan. They were launching mobile phones and laptops and we soon established a local assembly plant. In 2016, I was approached by the QMobile management to return to QMobile. I did so as I wanted to launch products under the Qmobile umbrella such as Q LED Lighting, Q Washing Machines, Q TVs and Q Motorcycles. However, things did not go according to plan and I eventually joined Sparx in 2022.

A: Which brands does the Deploy Group, which owns Sparx, manufacture?

ZQ: The Deploy Group mainly manufactures smartphones and Sparx is their premium brand, in addition to brands such as Xmobile, which consists mainly of feature phones and primarily targets rural audiences. At present, it has a 19% market penetration. Another brand is Xcess, which makes products such as smartwatches, earbuds and power banks. All three brands have the letter X in common to create synergy between them.

A: How has the response been to Sparx?

ZQ: Very positive. The first product campaign we rolled out featured Maya Ali and Wahaj Ali for our glass-finished phone – the Mi 7 Ultra. We have sold more than half a million units in 16 months and it is our most popular product. The product has evolved and includes models such as the Neo 7 Plus and Neo 8 Pro, which cost between Rs 20,000 and 35,000 rupees. We aim to further improve their price ranges and features. We also introduced our Edge series which is a high-end product at a very competitive price; Mahira Khan is the face of the brand. One of the reasons for the positive response to our products is the fact that compared to competing products, they have two to three more features and are more economical. 

A: Who is your target audience?

ZQ: It mainly includes 22 to 50-year-olds, most of whom live in tier two and tier three cities. The reason for this is that people residing in the metros have a lot more options than their non-metro counterparts. However, products from our Edge series also cater to urban audiences. Ultimately, we are trying to provide every market segment with a good product at a reasonable price so we can help people improve their lifestyles. In the segment in which we are operating (mainly cities and towns other than Islamabad, Karachi and Lahore), people earlier bought second-hand phones, especially in smaller cities and towns such as Faisalabad, Jhang, Okrara and Sahiwal. People there aspire to purchase a ‘dabba pack’ – a new phone – which has a warranty. We are penetrating that market, and provide phones with the features they require with warranties – at economical rates. 

A:Where are Sparx phones available?

ZQ: We are available in almost 90% of the country.  We are now partnering with Muller and Phipps, a leading distribution company, and this should increase our reach further in terms of towns, cities and retailers.

A: Where do the majority of your sales take place?

ZQ: We have outlets that we operate ourselves, but they are few in number and the majority of our sales come through retailers. We are available on several online platforms, although our online sales do not constitute more than five percent of our overall sales, as people prefer to buy phones in person. In fact, the overall sales of mobiles on digital platforms do not exceed 10% in Pakistan.

A: How many factories do you have?

ZQ: We have one factory located in Korangi in Karachi. We place a lot of emphasis on localisation and all the products are assembled there. The factory has the capacity to produce half a million units per month and is one of the largest in Pakistan.

A: There is a perception that foreign products are better in terms of quality compared to local products. How are you trying to overcome this perception?

ZQ: Generally speaking, people tend to undermine products made locally, no matter how good they are, and foreign brands take advantage of this although many of them use components made in China – even the iPhone. This mindset will take time to change, and the way we counter this is by providing a high-quality product at an economical price, and by focusing on providing efficient after-sales service. We also try very hard to facilitate our customers if they face any problems with our products to create goodwill. We have a network of 21 customer care centres, as well as more than 200 collection points, in addition to a functioning UAN number. If a product is under warranty, repairs are done free of charge within 24 to 72 hours. If the warranty has expired, we still make an active effort to resolve the issue.

A: How can Sparx compete with foreign brands?

ZQ: What works for us is the fact that foreign brands manufacture their phones on a global scale and they do not make products specifically for Pakistan. On the other hand, we have the leverage and capability to make customised products that have features Pakistani consumers want. Features important for Pakistanis include a good screen, a high refresh rate, ROM, RAM and the front camera to take selfies, in addition to faster charging times for batteries. Our cameras are always better than the competition within the relevant price segment. Many of our products have a dragon trail or gorilla glass finish, while other mobile manufacturers have a plastic finish. Furthermore, we use MediaTek chipsets which have better processing speeds while others use Unistock chipsets, which are not as robust.

A: Which marketing channels do you use to promote your products?

ZQ: We are very active on TikTok, YouTube, Instagram and Snapchat as these platforms have proven to be very effective in reaching young people. However, TV is still important in some cases because of its reach, especially when an event such as a cricket match is being aired or during Ramzan and Eid. We also use OOH and organise on-ground activities from time to time.

A: Is this true for your TGs in tier two and tier three cities as well?

ZQ: Yes, because people living in those cities don’t have electricity a lot of the time and are unable to watch TV, so they use their phones instead. In fact, the majority of TikTok users reside in these cities, not in the metros.

A: Do you rely on advertising agencies or is the creative work done in-house?

ZQ: We have an in-house team that handles the majority of our projects, but we also work with agencies and production houses from time to time, especially for our more prominent campaigns such as Helipad Productions, Simi Productions and Quetzal Studios.

A: How are the habits of mobile users in Pakistan changing?

ZQ: They are becoming increasingly aware of the products they purchase, and whether or not they fulfil their requirements, as they now understand which features can impact the performance of a phone; this was not the case five years ago. However, people are now changing their phones less frequently due to inflation. For instance, two to four years ago, many people would buy a new phone every six months; now, they change their phones every 12 to 18 months in some segments as their priorities have changed as phones have become more expensive. A phone that used to cost Rs 20,000 now costs Rs 45,000 to 50,000. 

A: How will 5G impact the telecom sector?

ZQ: We have always been late as far as introducing new technologies is concerned, even compared to countries like Afghanistan. Even now, 4G is not functional across the entire country, especially in the non-metros. I think 5G will be an improvement but it is not about speed – it is more about things such as driverless cars, health applications and drone technology, and for such things to work in Pakistan, the infrastructure has to be put in place. We hear that the 5G auction will take place in the first quarter of 2025, but I don’t think this will change much, because implementing 5G is not that easy, and will probably be available in three to 10 major cities. What is more important to focus on for organisations like the PTA is on providing better quality service, signal strength and speed. Some of the MNOs have started sharing towers which will improve coverage and reduce costs. Nevertheless, despite these issues, in terms of technology overall, we have done quite well as 90% of the phones are now locally assembled. We need to focus more on localisation and technology transfer and start manufacturing accessories such as chargers, batteries, and printing materials. Ultimately, the concerned authorities should make an active effort to implement the 2019 Mobile Device Manufacturing Policy which encourages localisation.

A: How will the buyout of Telenor by PTCL affect the sector?

ZQ: This is how international companies tend to work globally. They work in a country for 10 to 12 years, and then leave after developing the market; this has been the case in countries such as India and Myanmar. I think this merger will prove to be beneficial because I always thought we had more MNOs than needed, as the more operators, the lower the quality of service, and their ARPU keeps on dropping. The merger will likely result in better service, increased digital inclusion and improved ARPU.

A: Do you plan to expand Sparx to countries other than Pakistan?

ZQ: We would love to and we were excited to do so last year until the imposition of the 18% general sales tax which has become a big hurdle when it comes to exporting products. We are talking to the government to see how things can be improved. The government should come up with some kind of subsidy or tax holiday for exporters. 

A: What are your short-term and long-term goals? 

ZQ: We want to establish ourselves as a brand that creates value for its customers and provides them with good quality products, with good after-sales service. We hope to go into product diversification and not limit ourselves to mobile phones and introduce household technology-based products. However, this will take between two to three years to realise. Our short-term goal is to strengthen our market share and continue to provide people with high-quality products at reasonable prices.

Zeshan Qureshi was in conversation with Mamun M. Adil.mamun.adil@gmail.com