While Chinese smartphones are frantically vying for the top spot in the Indian market, in what appears to be a reverse flow trend, Indian manufacturer Micromax announced its plans of entering the Chinese phone market by 2017. This announcement was made by company’s co-founder Vineet Jain at the RISE technology conference in Hong Kong. He further added that the company would consider the possibility of either going public or taking help from private investors in the next two years in order to generate funds essential to compete in the Chinese market.
Competing in China
Entering the Chinese market is going to be an ambitious move for Micromax. Goes without saying that the company will see stiff competition from the domestic brands. The Chinese market, having sold almost 500 million phones last year, is a fiercely competitive one, thanks to the local brands such as Xiaomi, Vivo, Lenovo, and Huawei. Biggies including Apple and Samsung too have been focusing efforts in this market. While the Cupertino-based company has managed to retain its celebrity status in China, it hasn’t been any easy road for the South Korean conglomerate. Samsung and even Lenovo, apparently saw a decline over the period of 2014-15 in China. The top players in the country are currently Xiaomi, Huawei, Apple, Vivo, and Oppo in that order respectively. Apart from stiff competition, the fact that the Chinese market is already saturated has been the reason for many of these Chinese companies to divert their attention to other developing market such as India. According to the reports, the growth in China has seen a sharp decline from 20% in 2014 to just 2.5% in 2015. Breaking into an already saturated market with intense competition isn’t going to be a cakewalk for Micromax.
Interestingly, this news comes in the wake of decreasing sales in the Indian market for Micromax. Despite holding reign in the Indian market for a long time there has been news that the intensifying competition from the Chinese smartphone makers launching in the country as well as the internal changes within the company’s senior management has led to a slight dip in sales for the company. Micromax currently faces competition from Samsung for the number one spot.
Despite the odds, it is evident is that Micromax is aggressively trying to reach its goals of breaking into the prestigious top-five phone makers category worldwide by 2020. In order to do so, the company has been making efforts to make its presence felt internationally, using its tried and tested low-cost handset strategy. The company also invested significant amount of money to sign Hugh Jackman as a brand ambassador, which provides a much-needed global connect for the Indian brand. It is currently in the top three best-selling handset manufacturers in Russia, Sri Lanka, Bangladesh, and Nepal and that it generated revenue sales worth Rs 1000 crore from these countries collectively by March, 2016. It was also reported earlier this year that Micromax had plans of entering North Africa and the Middle East market. The company had also attempted to establish itself in the United States and Indonesia in the past.
While one can only speculate the reasons for Micromax to enter such a competitive market, it certainly seems like a risk on the part of the company that has equal chances of being crushed by its overbearing competition. What could possibly work for Micromax is the fact that it already manufactures its devices in China, which could thereby save it from the huge exportation costs that it would have to incur otherwise.