Home-grown handset maker Micromax Informatics on Wednesday unveiled its 5-pronged strategy to become a global consumer internet company from a pure play mobile phone maker, as it aims to become among the top five smartphone companies in the world.
“With our aim of achieving 100 million connected devices in the next two years, we want to make Micromax, the largest services company in India, consolidate our leadership position in overseas markets we are present as well as enter new markets. We would also continue to invest in different service categories which interest our consumers to create a strong ecosystem within our brand for the most compelling and seamless experience,” said Rahul Sharma, one of the four co-founders of Micromax.
Founded in 2007, Micromax had quickly grown to become the country’s second-largest mobile phone company by shipments, by offering affordable smartphones with latest technology features, according to International Data Corp., a technology research company.
With the new strategy in place, Micromax, first aims to become the fastest growing brand within India, launched 15 new phones on Wednesday aimed at different consumer segments. Secondly, it will explore entering into new overseas markets to spread its international presence, starting with Russia, where it has already become the third largest brand. The international strategy is also to propel the company to become one of the five biggest smartphone companies by 2020, said Subhojit Sen, chief marketing officer at Micromax. International sales contribute about 10% of revenue for Micromax currently.
The third pillar of growth is to add more consumer products including expanding its smart LED TV and Tablet computer sales as the company focuses on bigger screen electronic gadgets; and the fourth strategy is to add service portfolio to become a integrated devices and services company, Sen said.
Finally, the company aims to manufacture 100% of its products within India at its four factories in Andhra Pradesh, Telangana, Madhya Pradesh and Rajasthan, he said. Currently, Micromax makes 60% of its products from its local factories. Micromax will invest Rs300 crore in the new factories which will have a capacity to make 5 million phones a month.
Local manufacturing will boost the company’s profits as the government has allowed a 10% duty exemption on smartphones made and sold in India, and this would add to Micromax’s margins.
The “five pillars of growth” will ensure the company to get about 100 million connected devices in the next two years, from about 50 million now, Sen said.
The development comes at a time when Micromax is facing challenges especially from new entrants from China who are selling their smartphones at lower cost than what Micromax could afford, thus threatening its profits.
During October-December quarter, Micromax maintained its second position with 14.1% market share when 25.6 million smarphones were shipped into India, according to IDC. However, the New Delhi-based company’s shipments during the three months through December fell 12.1% on-year, and 23.5% from the previous quarter, IDC noted. “The vendor is facing tremendous competition from both home-grown and China-based vendors at different price points. Micromax’s 4G share of smartphones increased to 27 %, leading the LTE shipments amongst Home-grown vendors,” IDC added.
Moreover, the company has also seen some high profile exits including its chairman Sanjay Kapoor and chief executive Vineet Taneja in the past year, while the founding team decided to take back the mantle from the independent management to steer the company for future growth.
During the current year, Micromax aims to grow 40% in sales. During the fiscal year through March 2016, Micromax’s revenues crossed $2 billion, executives said.
