Micromax is steadily rising to the top of the Indian market. It has overtaken Nokia in terms of market share, and is closing in on Samsung, which is currently at the No.1 position. So how exactly is this “desi” brand competing against these giants?
Here is a narrowed down list of the five main reasons that are responsible for the rise of Micromax mobiles.
The smartphone revolution began in 2011 in India, when 3G services were first launched in this country. People began to move away from feature phones, and started to adopt smartphones instead. During Q2 of 2013, the sales of smartphone in India grew by three folds.
Indian companies are trying hard to give strong competition to numero uno Samsung, which has a market share of 25%. As per International Data Corporation’s latest report, Micromax is not far behind. It holds the No.2 position, with 22% of the market share. In the second quarter of 2013, this local manufacturer crossed the two million mark in shipments.
In contrast, Samsung and Nokia’s shares are dropping. The Finnish company that was the No.1 phone manufacturer in India till recently, has plummeted down to the fourth position. Another local vendor, Karbonn, now holds the third spot.
When Micromax set foot into the smartphone business, it didn’t rely on its own innovativeness. It waited for Samsung to offer brand new features on its phones, and the Indian company then added those features to its own products. Today, Micromax has a thirty-five person R &D team that continuously works on prototypes and designs of new handhelds.
A few years back, when competition between mobile operators for subscribers became intense, many customers wanted to own multiple connections. However, buying and carrying two phones certainly didn’t seem like the best idea. This is where Micromax stepped in with an innovative solution. They introduced the dual-SIM feature, and now 22 of its 26 smartphone models are armed with this feature.
Micromax has been releasing some innovative products like the X1i, which comes with a 1800 mAh battery. The phone is priced at just over INR 2,000, and has a standby time of 30 days. The phone became an instant hit in rural India, where electricity supply is unreliable. Likewise, Micromax X40 has a built-in projector,and also doubles up as a remote control for your TV and DVD player.
Micromax has not limited itself to only regular sized smartphones. It has realized that Indians love big screen, and has therefore come up with phablets. The sales volumes of phablets have grown by seventeen times on a year-on-year basis, and 33% of the market is controlled by three Indian brands, namely Micromax, Karbonn, and Lava.
Indians always look for goods that deliver value for money. Until a few years ago, cheap Chinese mobile phones had flooded the Indian market. However, those products were badly built, performed poorly, had invalid IMEI numbers, and gave out high levels of radiation.
When Micromax came into business, they sold low-cost Chinese handsets but provided warranty, and introduced some form of legitimacy. By offering low-cost smartphones with good specs, it gave budget customers exactly what they wanted.
Kiranjeet Kaur, Senior Market Analyst with IDC’s Client Devices group says that smartphones costing less than INR 13,000 are highly attractive to potential buyers. In February 2013, the company launched the Canvas HD model for INR 14,000. It comes with a 5 inch display, and a quad-core processor. Its dual-core edition is available for less than INR 10,000. In contrast, the dual-core Samsung Galaxy is priced at INR 28,000. In terms of quality, Samsung maybe ahead of Micromax, but the average buyer will always look at the price tag.
Effective Supply Chain
Big brand phone manufacturers often give very low commissions to their channel partners. This obviously results in a lot of dissatisfaction. Micromax decided that if would change this scenario, and now offers 5% commission to each of its distribution chain partners, which includes over 30 super distributors, 450 distributors, and 55,000 retailers. However, the company has said that it would not offer any credit. Simply put, distributors first pay Micromax, and then get their supplies. This new system has improved efficiency because retailers only buy what they need, and Micromax doesn’t have to face issues like dead inventory or price protection. Moreover, since the sellers pay for the products beforehand, they work harder to ensure that each item is sold.
When the Micromax Canvas 4 was launched, it was pitted against the Samsung Galaxy S4. Customers were surrounded by Canvas 4 commercials, and there was even a live web feed for the launch. In addition to all this, the company has now roped in movie star Akshay Kumar as its brand ambassador, and has adopted a new tagline- “Boring is out”.
Another effective marketing strategy used by Micromax was the release of its A55 Bling model, which was studded with Swarovski crystals.This phone became a huge hit, though it wasn’t the first phone to be made for women.
Moreover, since Micromax is an Indian brand, it understands the local market better than its foreign competitors. Unlike most phone manufacturers, Micromax concentrates on rural Indian markets, and identifies unmet needs of Indians living in such regions. The company then introduces products that fulfill their needs.
A combination of innovativeness, strategic planning, good marketing, and low-pricing, has made this Indian company a household name today. And if rumors are to be believed, Micromax now plans to pan out into foreign markets.