From Disruption to a Standstill: Why Micromax Needs a Quick Reboot

Micromax is looking to come back with a bang, but is it too late for the brand to resist the Chinese invasion?

Micromax started off its mobile phone journey in 2000, and by 2017, it had moved on to manufacturing TV sets, air conditioners and even laptops.

At one point, Micromax, with Hollywood star Hugh Jackman as its brand ambassador, was giving Samsung a run for its money in India with its popular Canvas series of smartphones. But since then, the Xiaomis and Lenovos have taken over the Rs 10,000 to 15,000 segment. Micromax has gone quiet over the past six months or so, with no major product announcement.

There has been a drastic management rejig at the company, and co-founder Rahul Sharma seems to have prioritised his venture, Yu Televentures.

Also Read: Micromax, Lava Bow Down to Xiaomi and Lenovo’s Rise in India

The lull at Micromax started in the second half of 2016, when Oppo and Vivo ramped up their presence in India, investing huge money in events like the IPL and the ICC World Cup. 

Tarun Pathak, Telecom Analyst, Counterpoint Research 

What Went Wrong?

Micromax carries its weight in the entry-level phone segment right now, where the Chinese counterparts are not engaged yet. But standing still hasn’t helped anyone before, and Micromax should know better.

Experts feel that Micromax’s reluctance to offer newer features like dual-camera and fingerprint scanner was their undoing. And ‘note bandi’ only meant they couldn’t offer new products during the 2016 festive season.

Indian brands decided to wait out the Chinese rush, but with demonetisation kicking in, local brands were the worst hit. The six-month period, without any new product to show, was heavy on them.

Tarun Pathak, Telecom Analyst, Counterpoint Research 

Unlike Vivo and Oppo, Micromax has over 50 products in the portfolio, so its falling stock in the vendor market didn’t help its cause.

From selling 3 million units in 2015, their sale numbers came down to 1 million by mid-2016. This is when Micromax lost its negotiating power with vendors. After all, vendors want products that sell more. 

Tarun Pathak, Telecom Analyst, Counterpoint Research 

Next big Move

Micromax is now back in the news, soon to launch its first smartphone with dual-camera. It remains to be seen if the company still holds its position among buyers.

But, interestingly, Pathak isn’t sure if a premium phone is what Micromax needs right now. He points to the feature phone market, powered with 4G VoLTE connectivity.

Instead of going for a mid-range or premium phone, Micromax should target the entry-level segment where the Chinese brands are yet to invest in. 

Tarun Pathak, Telecom Analyst, Counterpoint Research 

Reports indicate that Micromax is working on a slew of feature phones that will be launched in April 2017.

Feature phones are back for mobile brands in India, especially now that they support 4G VoLTE connectivity.

Telecom experts confirm this change in consumer dynamics.

Early adapters jumped to smartphones very fast, but laggards didn’t find it compelling enough to make the jump. Which is why feature phones are back in demand. 

Tarun Pathak, Telecom Analyst, Counterpoint Research 

They also feel these 4G VoLTE feature phones will turn out to be better than the existing range of entry-level 2G phones.

Getting it Right, Now

Having said that, consumers may want to give Micromax a chance to redeem its lost position. The mobile market is notoriously fickle. Micromax needs to be smart and pro-active. Pathak feels they should continue investing in startups like HealthymeFy, and get better with its product decision making.

Investing in startups has helped them, and they should continue to find more opportunities to do so. 

Tarun Pathak, Telecom Analyst, Counterpoint Research 

What they shouldn’t do is get into more product segments. Diversification is not sustainable in the long term.

They need to start from scratch, work like a startup. Rethink on its product strategy, go easy on the volumes, and focus on quality and not quantity for now.

Tarun Pathak, Telecom Analyst, Counterpoint Research 

It’s now up to Micromax to figure out if they are in for the long term, or they prefer blowing hot and cold every now then.

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