What were the key reasons behind the downfall of the most beloved smartphone brand in India? lets nosedive into it.
Nuts.Guts.Glory you might recognize this slogan from the Indian smartphone company, which once created a storm in the industry. yes, we are talking about Micromax. The Indian based mobile company that once shook the whole smartphone industry and brought mobile phones that came with mass appeal.
However, with the advent of Chinese companies and due to some blunders from the company, Micromax suffered a significant loss on just in terms of market share, but also in terms of the trust, it gained from its loyal customers.
HOW IT ALL STARTED
Micromax Informatics was founded in 1991 by Rajesh Agarwal and it served as a distributor of computer hardware for different brands like Dell, HP, and Sony. In 1999, Sumeet Arora, Rahul Sharma, and Vikas joined him as equal partners in the company. the brand later manufactured wireless public phones (PCOs). However, Rahul Sharma came up with an idea to make mobile phones and he convinced its partners to jump into this game. This resulted in the first product, the Micromax X1i feature phone, which became a massive success in the country in 2008.
Micromax failed to counter the Chinese invasion
Micromax relied on the Chineses ODM including Oppo, Vivo, Gionee, and more to manufacturers its smartphone in china. However, the company got a severe blow when the Chinese brands, which was once its OEM, decided to enter the Indian market with their own brands. This was the turning point for the Indian smartphone industry. The Chinese players did their homework and understood the point that the offline market is the key to establish themselves in the Indian market, explains Navkendar Singh, research director, IDC India, "Oppo and Vivo realised that the offline market, which accounts for around 60-65 percent market, is important that's why they started recruiting channel partners and distributors in those territories. They started making lots in investment in the retail sector" he said.
Micromax did not have the financial strength to fight the marketing, shelf space, and retail exhibition of Oppo, Vivo, and Gionee. The Chinese brands pumping money left, right and center to create a buzz in the market around their smartphones. On the other hand, Micromax and other Indian brands did not have that much amount of money to tackle the Chinese competition. The company had to face the brunt of the Chinese Invasion as its change of retailers and distributors were going to the Chines brands.
Micromax had a strong point of assembling products in India, while at that time none of the Chinese players had its assembly line in India. Then came the Make In India initiative from the Indian government and Micromax believes that it will help in curbing the Chinese invasion. However, it took a different turn. " The Chinese players took this initiative seriously and started assembling in India and now they manufacturing their products in India." Singh asserted. This left no ground for Micromax to compete with the Chinese brands in the country.
The advent of 4G destroyed Micromax
Although it is believed that Micromax downfall was due to the Chinese invasion, however, it is not the whole truth. The company's fall was due to their own doing and it was caught on the wrong side of the disruption. Micromax had around 40 products in smartphones ranging from Rs 5,000 to Rs 10,000 and all of them were based on 2G and 3G network. Things change rapidly when Reliance Jio introduced its 4g network and has started providing 4G SIM cards to the entire country. This drastically changed the whole landscape in both the telecom sector and the smartphone industry. With the introduction of the 4G network, most of the smartphone industry started shifting its focus to 4G, though Micromax remained reluctant to switch to the new 4G network. The company underestimated the 4G revolution in India.
Can Micromax make a comeback in true sense?
So, will it be easy fo Micromax to make a comeback in the smartphone industry? It is very difficult "Micromax needs a lot of financial muscle to fight these Chinese players". The fact that it is not impossible for the brand to make a comeback. Micromax needs to look into a few things and they need to get ducks in a row and focus on the budget segment.