29 March 2014

Story of Micromax Mobiles....

Micromax is the second largest smartphone brand in India with a 22 percent market share, closely trailing Samsung at 26 percent,. The homegrown smartphone brand is now gunning to topple the Korean Electronic gaint Samsung by Diwali to become the largest smartphone player.

The Growth Story

It was in 2008 that Micromax ventured into the mobile handset market. Within 6 years of its launch, Micromax has become the 2nd largest mobile handset company in India.
Its strategy to foray into the rural markets first itself was exemplary as the convention followed by marketers is to concentrate on urban markets and then move to rural markets. The company launched its first phone- Micromax X1, priced at Rs 2,150 in the rural market with a very unique USP of a battery standby time of 30 days. The company had done research prior to launching the brand, and gauged a consumer insight that most of the rural households do not get enough electricity to recharge phones on a daily basis.
However, tapping the rural market had its set of difficulties, namely in the logistics section as far as servicing was concerned. Micromax approached this difficulty by working on an effective distribution network. It now has a three-tier distribution network in India, consisting of state-level distributors (60+) , local distributors (800+) and retail outlets (50,000+) covering almost all the states in the country, including Tier-2 and Tier-3 towns. One of the highlights of the distribution strategy was that the company managed to secure advance from dealers by offering them more margins.
Unlike many challenger brands, Micromax was wary in its product strategy. Although all Micromax products were priced at the lower end of the spectrum, its product range generally has some USP which offers more value to the consumers. The brand boasts of launching many firsts in the market such as 30 day battery life, affordable QWERTY phones and affordable Double Sim.

Taking the battle further

Local smartphone brands now account for over 50% of all smartphones shipped into India, the fastest growing and the third largest smartphone market in the world. So what is it that local players are doing right and global players such as Samsung, Sony, LG are not?
India is also the largest feature phone market in the world. Even though the market share of feature phones is declining, these low-cost phones still account for almost 85 percent of the overall mobile phone market. Out of the total smartphone market, 67 percent of devices shipped are priced under $200. The biggest pie of the smartphone market, hence, lies in the low-cost devices targeting users who are upgrading from a feature phone to a smartphone.
The golden formula of the Indian smartphone space seems to have a sub-$200 smartphone with a large display (phablets account for a third of all smartphones) and dual-SIM slots. This is something that local smartphone brands have caught on quickly while the global brands are yet to realize it. A quick search reveals that Samsung has just one, LG has a couple while Sony has no smartphone with a 4-inch or bigger display priced below Rs 10,000! And that is where most of the action is happening.
This is a repetition of the scenario that unfolded around five years ago when local brands such as Micromax first emerged and launched dual-SIM feature phones in India. Nokia, still the market leader at that time, ignored the trend, mistaking it for a fad. Finally, after losing out to local vendors and Chinese manufacturers in the feature phone segment, Nokia had to launch dual-SIM phones in 2010.
The biggest barrier for local brands is the ability to convince users that theirs is a quality product but tier one brands are making it easy for them to make the first sale. If users are convinced that the local brand provided them the most bang for the buck, their next product is also likely to be from a local brand rather than a tier one vendor, who is most likely to have a better quality product but at a premium price.
Once the taboo of using a local brand is left behind, both the users and brands would evolve to higher-end segments of the smartphone market. This is already happening, at least for Micromax, which recently launched a Rs 20,000 smartphone. Over 11,500 people preordered the Canvas 4, an Rs 18,000 smartphone, without much knowledge of its specifications. Who would have thought that anyone would spend that amount of money for a Micromax smartphone?

Disappointing Customer service 

Unfortunately, Micromax too suffers from the one big folly that ails Indian consumer technology companies - inferior customer support. It's low cost and VFM strategy has got it this far, but if it has to take on the biggies such as Samsung and Nokia, customer service is one area the company has to immediately work on. This could be the deal maker or breaker, going forward.

Going global with the Wolverine

In a latest move to promote its upcoming smartphone model Canvas Turbo, Micromax has appointed Hollywood actor Hugh Jackman as its brand ambassador. . This is more likely to change Mircomax’s perception of the low cost handset maker across all users and industries. Given the huge following and stature of the ‘X-man’ actor, Micromax could easily take its brand and devices to users in other countries.  

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