Micromax To Go Global, But China Aspiration Is An Uphill Battle !

Credit: BGR

The posted buy of Smartphone revolution in India Micromax informatics is finally going global, amid to the growing competition in the indigenous market. The company which rose to fame in Q4 2014 when Micromax became the Numero-Uno smartphone manufacturer in India, is struggling to mend its ways in the Indian market in the current scenario.

Despite falling sales numbers, Micromax’s spirit is undying and the once promising start-up has now set its eyes on the globe especially on China. Interestingly, Micromax’s ambitious goal doesn’t end here; the company is setting its sight on being one of the top-notch smartphone manufacturers in the world. And, to become one of the top five biggest brands in the world, one just cannot ignore the Chinese market.

“We do keep evaluating about two to three international markets. Not to say we’re definitely going to launch in any of the three. If we have a vision of being in the top five, we can’t be ignoring the China market.” Vikas Jain, Micromax co-founder said in an interview with Bloomberg.

Micromax has already pierced the Russian smartphone market and is ranked 3rd in the country. But the company has, so far, failed to replicate the same success in the United States and Indonesia.

The company always adopted the ‘flooded approach’ i.e. multiple low-price smartphone launches within a short span of time, thus providing consumers with a variety of option. In April, Micromax introduced 15 different models in a single day.

The once promising Indian start-up manufacturing rose to fame by importing and rebranding phones from China and then selling them in Indian markets at a minimal profit. Consequently, it emerged as a dominating smartphone player around Q4 2014. The success, however, was short-lived as the major smartphone manufacturers in China have decided to take a plunge into the growing smartphone market of India. Soon, the market was flooded with low-priced smartphones that started eating into market share of Micromax in India. Between Q4 2014 and Q4 2015, the market share of Micromax squeezed from 22% to 14.1%. And, if that was not enough for the company to feel the heat, Micromax’s Chairman, Sanjay Kapoor and later CEO, Vineet Taneja decided to jump off the drowning ship.

Succumbing to both internal and external pressures, it will be interesting to see how will Micromax response questions starring at the company in China:

  • What strategies could Micromax adopt to grab a sizable share of saturating smartphone market of China?
  • How will the company be able to take on the Chinese smartphone honchos who ironically have pulled down Micromax from being the top smartphone manufacturer in India?
  • The even bigger question, how Micromax will be able to fulfil its aspirations to feature in the top 5 global smartphone manufacturers?

Fulfilling the aspirations

Every single smartphone manufacturer has set its eye on India amid to the shrinking growth opportunity at the global level. Developed markets, likes of the US and China, have either saturated or heading towards saturation. While the global smartphone shipments growth in Q1 2016 flatten out, China recorded a tiny 2% YoY growth in smartphone shipments in Q1 2016. The smartphone market in India recorded a 29% YoY growth in Q1 2016 and smartphone penetration in India stands at a tiny 17% of the total population. Despite all such visible opportunities in India and growing challenges in China, Micromax’s decision to tap China smartphone market has surprised many. Analysts believe that due to declining sales and shrinking ASP of smartphones in India, Micromax has decided to expand its horizons beyond its home-grown market. But how exactly the company is going to achieve this ? There’s not been a clear-cut explanation from Micromax side as they want to keep their aspirations secret.

Indian smartphone giant is lately aided by Sequoia Capital, a US venture which will provide the essential software to strengthen its hardware appeal. Vikas Jain, the co-founder, refused to divulge any details regarding the future of Micromax but assured, “

“There are a few projects that the team is working on that we really feel should be the differentiator. I’m sure that it will really make a change in the way mobile phones are looked at and used.”

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