We are turning back time. You will again see Micromax phones in stores, online and physical, in the very near future. It has been a while since Micromax sold phones in India, at least in the meaningful sense as far as the smartphone market is concerned. The company has made it very clear that it is going to be combative, will play the price and value card and most importantly, offer another choice to consumers. Late last week, Micromax co-founder Rahul Sharma rolled out a video message on social media in which he confirmed the “in” branding for the phones. The specifics of the phones that are set to be launched in India haven’t yet been officially revealed, but it isn’t hard to imagine Micromax going for the most exciting smartphone price bands—under Rs 10,000 and between Rs 10,000 and Rs 15,000. That is where the most volumes are, and mind you, that is also where the most aggressive competition is.
Micromax’s return to the smartphone market in India comes at a time when sentiments are high and there is a big push from the Government as well towards Make in India and Atmanirbhar Bharat. Earlier this month, the Government had confirmed that Bhagwati Products, the company that manufactures phones for Micromax, is eligible for the performance-linked incentive (PLI) scheme. There are others too, phone makers and manufacturers, including Samsung, Apple iPhone and Apple hardware manufacturers Foxconn, Wistron, and Pegatron as well as Lava, Karbonn and Dixon to name a few.
The PLI scheme is a push by the Narendra Modi government, for manufacturing and Make in India with local manufacturing targets that will generate employment, and also provide a boost to exports done from India. Last month, it was reported that Apple and Samsung plan to export phones worth $50 billon each over the next five years. There are also five Indian phone makers or manufacturers, including Micromax, Lava, Karbonn, Optiemus and Dixon. It is expected that India could export mobile phones well in excess of $100 billion in the next few years.
Micromax “in” phones come as part of the company’s plans to invest Rs 500 crore to develop and manufacture phones in India. Micromax is very clear on the fact that they will build the new smartphones from the ground-up. They will rely on two manufacturing facilities within India for the time being, one in Bhiwadi and one in Hyderabad. The company says these facilities have a capacity of producing more than 2 million phones every month.
There is a concerted effort to reduce India’s reliance on Chinese manufactured goods, particularly after the tensions flared up at the Indo-China border in the Galwan Valley earlier this summer. Consumers, if the sentiments on social media are anything to go by, want to buy more products made by Indian companies or those that are Made in India, and not shipped in from manufacturing facilities in the neighboring country. There is also global pressure, including that from the Trump administration in the US, as a fallout of the trade war between the two countries and the COVID pandemic.
The biggest advantage for Micromax would be that it already has a large retail presence in the country. Particularly in the tier II and tier III towns, where Micromax logged a very strong showing during its previous peak performance. At the most, it may just have to reactivate some of those dormant partnerships.
In the video message, Rahul Sharma admits that the company made mistakes earlier. It did take a monumental collapse to see Micromax which saw the company become one of the biggest smartphone manufacturers in India in 2010, grow at a steady pace to grab the largest market share in India by 2014 ahead of Samsung and also become the tenth largest smartphone maker in the world. It surely wasn’t a bad start for a company that started selling mobile phones in 2008, with a mix of budget phones, feature phones and smartphones as part of the line-up. It must be considered a positive that the company understands where it went wrong in the past, knowledge and insights that will help them chart a more robust course for the future. “When you have the word India or ‘in’ on you, it gives you a sense of responsibility. The weight of a billion hopes. But bigger than anything is the pride it gives,” says Sharma in an official statement. Responsibility is what the company seems to pride the most, which is a solid foundation to build on.
It was a combination of factors contributed to the slide. The Chinese smartphone makers, including Xiaomi, OnePlus, Oppo and Vivo arrived with an aggressive marketing plan, phones that offered significantly better specs at the same price and in general a more vocal approach to the consumer sentiment about wanting more bang for the buck. They had massive manufacturing facilities in China to rely on, which not only gave them a cost advantage but also the much-needed buffer to set up the manufacturing units in India without any disruption in sales or the aggressive rollout plans. At the same time, Micromax also attempted to diversify into the ecosystem play, which included the likes of smart TVs and appliances including air conditioners and refrigerators. In hindsight, that ecosystem play perhaps came much earlier than it should have. Now would be a good time, after the smartphone market is in the grasp again.
Mind you, it will be very tough though. Xiaomi at this time has a marketshare of 29.4% as per the IDC Quarterly Mobile Tracker from August. In second place is Samsung, with 26.3% market share and Vivo slots into third place with 17.5% share. For all its previous experience in the smartphone market in India, there will still be a steep learning curve for Micromax. That perhaps makes the pursuit even sweeter.