The Mobile Indian

Micromax: Capitalising on innovation and pricing

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Micromax is now India's third-largest GSM mobile phone vendor with a market share of six percent after Nokia (62 per cent) and Samsung (8 per cent).

"How much would a Micromax Android handset cost me?" a 60 year old man who hails from Shimla and is very young at heart, asked me a couple of days back.

"Only Rs 7,000," I replied, but inquisitively asked him why he asked only about Micromax and nothing else!

"Because almost every household in in Shimla owns at least one handset from Micromax," he said. "And it is popular because of friendly shopkeepers who offer amazing discounts on handsets from the company, and the promptness of service centers in solving the problems faced by Micromax handset owners."

The above instance only underlines Micromax's phenomenal rise as a handset make in India.

In 2008, when the Indian handset market was dominated by multinational companies such as Nokia, Samsung, LG, Sony Ericsson and Motorola, Micromax joined the party with an aim to provide mobile users entry-level and mid-level handsets priced between Rs 1,800 and Rs 2,400.

Rajesh Agarwal, a distributor for computer hardware brands such as Dell, HP and Sony, along with his three friends Sumeet Arora, Rahul Sharma and Vikas Jain, launched Mircomax, the first Indian handset company.

In the initial phase of their journey, Micromax had confined itself to small towns and rural areas, but now, after three years of operations, it has a distribution network of around 75,000 retailers across the country.

"Micromax has sold 7.05 million mobile handsets in the last fiscal. The company's handset sales have grown by 132.43 per cent from 1.11 million units in the quarter ended June 30, 2009 to 2.58 million units in the quarter ended March 31, 2010," points out Rahul Sharma, executive director of Micromax.

Sharma further adds, "We have introduced more than 40 distinct mobile handset models since our company started operations and will keep on increasing our portfolio."

Micromax is now India's third-largest GSM mobile phone vendor with a market share of 6 per cent after Nokia (62 per cent) and Samsung (8 per cent), according to research firm IDC.

Micromax's rise has also been propelled due to the Indian government's crack down last year on brandless imported Chinese phones that lacked an identifying IMEI number. As consumers rushed to replace their cheap Chinese phones to avoid having their mobile services disconnected, many opted for the relatively affordable Micromax handsets.

Innovations

Erratic power supply is a major problem in rural as well as urban India, and to address this problem Micromax increased the size of the battery to 1800 mAh, as a result of which its X1i phone lasts for 30 days on standby and that too at an affordable price of Rs 2,150. The phone was a big success in rural India and gave the company an initial boost.

Micromax knew that if it wants to maintain momentum and challenge well established players such as Nokia it needs to strengthen its distribution network because even after the success of initial launches its brand recall value among customers wasn't great.

So the company came up with another innovation, this time pertaining to distribution. Micromax knew that commissions given by phone manufacturers to their channel partners are often very low, leading to a lot of dissatisfaction. The company decided to give around five per cent commission to each of its distribution chain partners, which rapidly led to increase in sales.

After this, Micromax expanded its range of handsets in keeping with new market demands. In 2010, it even tied up with MTV for co-branded phones to connect with potential customers in metros.

Another way in which Micromax innovated was by launching dual SIM and dual reception (GSM and CDMA) handsets before Nokia did.

In its latest innovation, to suit the requirements and preferences of different consumer groups, Micromax has released Android and touchscreen handsets for less than Rs 7,000 each.

Micromax also has mobile phones with Qwerty keyboards, utility, 3G, gaming and multimedia handsets, phones that work as universal remote controls etc.

Portfolio

Since Micromax's entry into the Indian handset market in January 2008, it has introduced more than 40 mobile handset models.

Sharma said, "Micromax believes that consumers in India have unique preferences with respect to mobile handsets. Therefore, the company has strategised on innovating, designing and using the latest technologies to develop products at affordable prices. In addition, Micromax also focuses on developing higher value premium products targeted at urban populations."

He further said, "Micromax sells mobile handsets that access networks on CDMA and GSM formats. In addition to different network access formats, our mobile handsets reflect various combinations of distinct features and functionalities, including weight, dimension, memory type and capacity, battery type, battery life and display type, as well as camera, video, GPS, Wifi, 2G or 3G capability, sound, music, radio, Bluetooth and messaging capabilities."

Micromax's portfolio in divided in 12 handset categories -- gravity, universal remote, gaming, 3G, marathon battery, multimedia, Qwerty, smartphone, dual SIM, utility, Android and touchscreen.

Customer service

The most important thing that increases customer loyalty is its after sales service, and to achieve this Micromax has more than 370 strategically located sales service centres in India, and also one each in Nepal and Sri Lanka.

In addition to the service centres, Micromax also has tie ups with five third party owned, modular (component) service centers which are exclusive to Micromax and provide a full suite of after sales services excluding chipset and printed circuit board (PCB) replacement.

Sharma said, "We have also established a service factory in New Delhi, which provides a comprehensive range of services, including chipset and PCB replacement services. The service factory supports our modular (component) service centers and ASCs by supplying the necessary inventory and supporting technical teams in order to reduce turnaround time."

Products in pipeline

Micromax will continue to offer a variety of commercially appealing mobile handsets with attractive aesthetics, designs and a combination of innovative features that are easy to use, and are suited for local requirements and preferences of different consumer groups.

The company plans to target segments in which it is currently not present and will grow its portfolio of CDMA and 3G products. In the coming months Micromax plans to launch more handsets in the Android and touchscreen categories.

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