The Micromax Story
Chinese mobile phones had just started coming to the Indian households. Cheap knock-offs of various high-end mobiles for costs cheaper than what the Indian market ever saw. There was actually a flood of these models. Now, for an Indian audience Chinese products may not be of the same value as it has for an American/ Europeon market, where China ships some of its fine quality stuff, but surely for a fad, when mobile handsets had just started bulking up pockets for the population, it gave them an option.
Around this time, some of the Indian companies too entered the fray, with their own addition to the existing competition in the mobile phone segment. Micromax was one of them. With a target audience catering to the low-income groups and the rural households, they based their value proposition out there, with extensive features vis-a-vis the big brands, of course with a low-price point.
Now, picture that time and contrast it with the most recent diwali advertisement of Micromax featuring Hugh Jackman. A complete change. And this just doesn’t reflect in their aspirations in terms of the marketing campaign, but the numbers speak for themselves. They currently hold the second spot at 22% market share. Commendable, the way they have grown. IDC’s (International Data Centre which tracks technology data) Q2 results compilation showed that the company had a 22 percent market share in the Indian smartphone market. While the revenue as of 2011-12 stands at Rs 1,978 crore or Rs 19.78 billion.
There are of course no quick and fast rules for this ascent. A number of factors have contributed to this growth, which are slowly propelling them onto bigger heights. Some of the notable reasons may be put may be put down as:
1. Using china as a manufacturing base: Micromax took pains to mark out those manufacturers in China who were working with global brands like Apple and Samsung. For instance FoxConn manufactures the handsets for Micromax too now. This has put Micromax in a better position to compete with other big brand by ensuring quality products.
2. Rural target market: The primary target for Micromax was the rural market, which it catered to by arming itself with a 30-day long battery phone and dual Sim phones. Both of them were a hit and that too at affordable prices. This entailed them with a market of their own. It’s not that other established players like Nokia or Samsung didn’t cater to this market. But Micromax was laced with more features, which the basic phones of these brands couldn’t offer. The rural population which chose features at lower cost over brand value, turned out to be a good start for micromax.
3. Early android adoption: When others were dishing out new operating software, or continuing with the old one (Nokia with Symbian), Micromax lapped up the opportunity of using Google’s Android. This helped them target the youth market in a better way. The aspiring youth, who couldn’t afford the high end Android devices, were targeted.
4. Product rollout: Where big international brand requires roughly 18 months for a similar product to go through the retail pipeline, Micromax takes barely a month or two to launch products. This has ensured that variety as well as new-technology adoption, which helps offer the customers something new regularly. Even the Canvas series, which has been selling like hot cakes, has helped it to scale up the brand value and reposition itself as not just a “cheap handset maker”. The pricing strategy adopted for this has helped it a lot too. The products, even its’ high priced Canvas are lower than Samsungs’ Galaxy series.
5. Promotional campaigns: It has targeted Cricket and bollywood as the basis of promotions for itself, which is directly catering to the Indian market as it is these associations, which has garnered it the visibility and also helped it shed its image of a Chinese phone to a Brand on its own. Recently it associated itself with a fashion show, where designers used its latest Canvas Turbo with full HD in the designing of their apparels. Of late, it has relied on premium associations so as to continue re-positioning itself, and shed its’ long standing image of a low-price player.
Micromax has definitely repositioned itself and established a force in the mobile segment. Although issues like labour wages in china are proving to be a roadblock to its supply chain strategy costs , the LED Tv which it manufactures in its Gurgaon plant is surely a stepping stone and a probability that it can shift from china to India, provided with the appropriate build-up of its’ infrastructure environment.