Chinese smartphones, and demonetisation, burn out Lava Mobile

Phone maker Lava International Ltd was, not long ago, a leading poster boy of the government’s Make in India dream, with value-for-money offerings for the price-conscious customer, apart from playing a significant role in creating a domestic manufacturing ecosystem for mobile phones. Today, the nine-year-old company is facing a severe liquidity crisis, and failed to pay November salaries to employees on time. Increased competition from Chinese smartphones that have grabbed the Indian handset market, deep discounting by e-commerce platforms and the heavy blow of demonetisation have led to turmoil in the company. At the same time, poor sales have led to cash flow problems with retailers who have not paid distributors, in turn affecting Lava’s sales and its suppliers as well.

Source: Livemint