Despite being the the tenth largest handset vender, Micromax's journey continues to be turbulent. A fleet of Chinese mobile handset firms have entered the country. But, according to an IDC report, its domestic competitior, Intex, is a threat to the company. Micromax chief executive Vineet Taneja tells Arnab Dutta his plans for the company and insights into the sector. Edited excerpts:
In the past year, a number of Chinese firms have flooded the affordable segment in India with branded products. Hasn't that made Micromax’s position vulnerable?
Yes, the market is hyper-competitive. We are focusing on innovative solutions, in terms of hardware that is easy to replicate, and also on software that will let us stand out. The ecosystem that we are working to create, will act as an aggregator — providing utility solutions, information and entertainment at one go. And, I expect some tangible differentiation being visible in the next few months.
Also, so many players will not survive here. Consolidation and churning will take place in the next few years in India. While launching a new handset, though the online channel is easy, it is hard to hold on to (sales) numbers. Our innovativeness is not based solely on product introduction, it is also based on our understanding of Indian consumers. Replicating a Chinese model of business will not work here.
According to IDC shipment data for the September quarter, Intex has toppled Micromax from the second spot in the Indian market. Is Micromax tough enough for a comeback now?
The best way to judge the position of a handset player in India is to track import data. According to Info Drive, during the September quarter, Micromax imported 9.7 million handsets, which accounts for 14 per cent of the market, including 5.6 million smartphones. And since on a quarterly level import data is a clear reflection of sales, I don’t see a chance for any other company overtaking us currently. Micromax is a clear number two in smartphones, holding an 18 per cent share, and the third player has sales less than half of ours.
Micromax entered the 4G segment a bit late compared to many of the players in India. Wouldn’t you agree that Micromax missed the opportunity?
Yes, many companies introduced 4G phones ahead of us in 2014. However, none of them were in the affordable, (Rs 5,000 to Rs 10,000) category at that time, which I don’t consider to be a step we would like to take. Today, 50 to 60 per cent of smartphones sold are in the affordable price range, which Micromax is catering to and is among the few companies to launch a 4G smartphone in the segment.
Now, there is a lot of buzz about 4G services being launched in India and we too are speeding up to match the demand as consumers now want to be future-ready when it comes to technology.
We are trying to rapidly transform our 4G smartphones portfolio and have launched 13 long-term evolution (LTE) handsets this year.
Of late, Micromax has not been visible in big platforms or events like cricket tournaments or the Indian Premier League. Is there a shift in your promotional strategy?
Cricket as a platform is good for a new handset company, trying to get consumers’ attention, which does not apply to us. We leveraged that platform when we were a lesser known brand. But, sponsoring a cricket tournament will not give us the kind of return we may now get from the digital platform which has the highest ROI (return on investment). Thus, now our focus is on capitalising the digital media with an eye on mobile marketing.