Micromax story is really incredible in many ways that the homegrown brand went on to become the leading brand in the country challenging Samsung in its prime and has the entire ingredients to repeat itself inspite of the huge success of the Chinese brands. A brand that had started a sub-brand, YU Televentures, for the online buyers when no company would have imagined and it garnered success all across for its machoism. We explore the journey of this incredible brand through our prism.
Micromax, the homegrown consumer electronics company based out of Gurugarm in Haryana, has been a much loved child for the Indians not only because it is an Indian company but, due to fact that this company made them fulfill their dreams of owning a smartphone, TV or Air Conditioners, etc when it seemed a distant dream for them. The company which is a brain child of Rahul Sharma, Vikas Jain, Sumeet Arora and Rajesh Agarwal has always been the first choice of the Indian buyers in metros as well as in far flung areas of this huge nation. An Indian company that reached out to Hugh Jackman for endorsement whose dominance can be ascertained worldwide. Not only in India, the homegrown brand, had also entered the shores of Russia in 2014 which no Indian company could have ever dreamt off and becoming the second most smartphone selling company there. We all know by our primary and secondary sources that Micromax was started as an IT software company in 2000 supplying components to the likes of Nokia, Dell, etc, and then finally venturing into handset manufacturing in 2008. Micromax was amongst the first Indian companies that democratized the smartphones at a time when 3G was picking up. Apart from this, Micromax was also among the few companies which started its mobile manufacturing in India after Samsung and Nokia.
|“Micromax was amongst the first Indian companies that democratized the smartphones at a time when 3G was picking up”|
Micromax entered into Indian mobile phone market, when it was dominated with likes of Nokia and Samsung. This was those times when buying a mobile handset meant entering a retail shop and purchasing a Nokia or a Samsung handset for the larger consumer base. The focus was to fill the gaps in the market by launching products that fit well within those gaps. Micromax primarily focused on rural markets initially by understanding the unmet needs of these people and introduced pocket friendly products that fitted well within the consumer need. They clearly understood that an Indian consumer will always look out for products that deliver value for money proposition. Within the smartphone segment, the company stood tall at 2nd slot from CY 2013, 2014 and 2015 at the back of its value for money phones.
In 2007-2009 when mobility was expanding Micromax pitched in with relevant product like long battery, big sound, affordable with good quality and most important very dedicated and committed channel. They were close to customer requirement and aspiration. Again during 2011-12 when feature phone segment got cluttered and it was getting difficult to hold market share for it, they again latched on to smartphone strategy meeting the expectation of the consumers who wanted to experience smartphone but, cannot afford.
The table turned upside down for Finnish giant Nokia in 2012 when it was toppled by the Micromax to be the king of feature phones in India. The company gave the value for money specifications under the hood without hurting too much on the Indian pockets. In the first quarter of 2015, Micromax had again emerged as the second-largest smartphone maker with a 16.22 percent market share. Subsequently, the market share remained intact for Micromax till the fourth quarter of 2016. To claim, Micromax was at second spot with close to 16 percent market share in Q1 of 2016 which reduced to near 15 percent in Q2 of the same year but the spot remain cemented. The Q4 of the 2016 saw the maximum decline for the brand as the market share dipped to 2.54 percent and was reduced to the 12th spot in ranking. Again, the homegrown brand witnessed a little jump into its market share of first quarter of 2017 at 2.74 percent and re-entered among the top ten mobile brands of the country.
The challenge that lay ahead of the company was to create a mindshare in an already cluttered market and reach to the mass consumers in India who wished to own a mobility device to make their life simpler but were not too keen on adopting a mobility device due to the price constraints. The brand needed to build trust relationship amongst the consumers about products and innovations. In order to achieve this, the company adopted the utilitarian philosophy to cater to all fragments of the society, with equal zeal and enthusiasm and came up with products which they can relate to in their everyday lives. It had a readymade distribution setup that was running when it got launched and that helped the brand to propel among the every nook and corner of India.
The same pitch was echoed by most of the retailers in the country. They still have the feeling that Micromax was a hot favorite among the buyers. A leading mobile retail chain shop in New Delhi says that people used to enquire a lot about the brand. “We were selling five to six handsets of Micromax a day during 2015-16,” says the manager of the mobile chain on the condition of anonymity.
Interview : Rajesh Agarwal, Co-Founder Micromax Informatics
Micromax reached the pinnacle of success in India and in Russsia too is proven by the fact that the brand went on and signed Bollywood actor Akshay Kumar his actress wife Twinkle Khanna for the brand promotion. It did not stop there and further took famous Hollywood star Hugh Jackman of the Wolverine fame on board in 2013 to endorse its first flagship smartphone, Canvas Turbo A250. Later Anil Kapoor also became the face of the brand in India. Micromax was the first mobile brand to introduce a feature phone with month long battery backup with the X1i. Micromax realized at that India was power deficit nation at that time and giving such mobile phone with a month long battery proved vital for the brand outreach in the rural areas.
The company’s innovative pricing, also helped it to achieve reasonable degree of success. Through its emphasis on adapting to the changing market dynamics, introducing feature-rich phones and smartphones that are innovative and unique, Micromax become a brand to reckon with. “Micromax helped penetrate the smartphones in the lower to mid strata,” feels Faisal Kawoosa, a former Principal Analyst (Telecoms) at CyberMedia Research.
Additionally, taking learnings from its mobility business, Micromax eventually diversified in the consumer durables segment with our range of LED TV’s, Sound Systems, Air Conditioners, Air-Coolers and Washing Machines.
“Micromax primarily focused on rural markets initially by understanding the unmet needs of these people and introduced pocket friendly products that fitted well within the consumer need,” said Upasana Joshi, Associate Research Manager, IDC India.
Micromax not only relied on the offline sales in which the company has an upper hand but, also started its online entity called, YU Televentures under the guiding force of Rahul Sharma and it did really well among the likes of Samsung since 2014. Many among us would be pleased to know that Micromax was the first Indian company to come with Android One smartphone called the Canvas A1. The same concept was once again picked up by Chinese smartphone vendor Xiaomi in 2017 with Redmi A1.
Talking of Make in India, Micromax was one the few companies to start its own manufacturing facility in India in 2014 itself in the state of Uttarakhand. According to the news, the company invested Rs 500 crore in setting up a new manufacturing facility in Rajasthan and another Rs 400 crore in Hyderabad. To capitalize the growth of Jio and 4G in India Micromax started making Bharat series of feature and smartphones to cater to the demand of its trusted user base across the country. Micormax has been quiet but not out in the recent time. It keeps a tab on the changing dynamics of the smartphone industry in India and keeps rolling out devices which are upto the market sentiment and requirements. In order to stay ahead of the curve Micromax brought its bezel-less smartphone Canvas Infinity last year to remain the first choice of the Indian buyers. The smartphone actually did very well for the brand among the crowded smartphone environment. There’s’ still a sense of warm feeling for the brand which we saw during the course of the story. People still have the aura created by the brand due to its uniqueness and price competitiveness. The sudden change of the technology from 2G, 3G to 4G took the company by surprise and adding on to that demonetization played a crucial part in the positioning of the brand.
Recently, Micromax got the supply order from Chhattisgarh government’s Sanchar Kranti Yojana under which Micromax will supply Bharat 4 and Bharat 2+ smartphones to it fulfilling the mission of Digital India. This will act as a catalyst for the brand to prosper more in the country.
|“To capitalize the growth of Jio and 4G in India Micromax started making Bharat series of feature and smartphones to cater to the demand of its trusted user base across the country”|
It’s never too late for anything in this world. Micromax has the experience, know how, capabilities and deep understanding of the Indian market to bounce back and give it a punch. The current market share of Micromax is at 2.1 percent in smartphone segment as of 2018Q1.
To counter the strategies of China based vendors, Micromax will have to re innovate their products to match the current technologies running in the market and which have become a norm like – bezel less screens, 18:9 aspect ratio, inclusion of a notch, AI on device etc. not to forget the competitive pricing at which these models are launched, believes Upasana Joshi. Additionally, they would have to invest on creating a noise and space for them to re-register themselves in consumer mind. What will work for Micromax is the strong distribution connect that they already have in the market.
I think it has already found out a gap and it working on it. As far as I know they intend to bring the company back on track and that means there should be a way out, says Faisal.
Micromax is a mass name and it caters to the masses in Tier I, Tier II and Tier III and even in rural market. The consumers in the contemporary rural market today have an increased disposable income and desire for better products and services.
The increase in the rural consumers’ purchasing power ends up leading to independent buying decisions which affects the changing shape of marketing in such areas for the brand. Of late, there has been an increased convergence between urban and rural consumers – especially with the young consumers who have almost the same aspirations. In fact, according to a couple of new researches, consumers from rural towns are spending more on premium products as against their urban peers.
Also, with the advent of e-commerce, a lot of tier 3- 4 and rural markets are also reaping the benefits of the same but, mostly that market is still dominated by offline sales as there are people who still want the personal touch of a salesperson. Hence, being a mass brand, Micromax continues to cater to all the segment of society with both our brands Micromax and YU.
Micromax will have to stick to the basics it was doing earlier, i.e, provide price-specific, price-justified specifications in its smartphones both offline and online via YU. People still feel attached to the brand as it gave them an opportunity to realise their dream of owning a mobile phone which was Made in India.