Micromax stages a comeback, to take on the great wall of Chinese smartphone brands

Co-founder Rahul Sharma released a rousing video last week, but it will take more than just smart marketing to regain lost ground.

Micromax’s new video featuring co-founder Rahul Sharma ticked off most tropes one can use to rouse the emotional Indian. Rags to riches tale? Check. Taking a loan from ‘sarkari job wala’ father to start a business? Check. Being vanquished by foreign brands in your own home? Check. Rallying call against hostile neighbour? Check.

The week-old video has garnered its share of ayes and nays because it’s quite timely, considering the present circumstances. But, is it enough for Micromax to stage a successful comeback in the cut-throat world known as India’s smartphone segment?

Founded in 2000 by Sharma, Sumeet Arora, Vikas Jain, Rajesh Agarwal, the Gurugram-based company was first a technology supplier to Finnish company Nokia. It was only in 2008 when it became an active seller of phones.

Micromax released a slew of inexpensive feature phones in 2008-09 that let it stand out: X1i with long battery life; X250, which was India’s first dual-SIM phone; Q35, India’s first QWERTY keypad phone; and X235, the first universal remote controlled phone in India.

The new decade ushered in the era of smartphones, and Micromax made the most of it. It launched its Canvas range of smartphones. There was the Canvas A1, was the world’s first Android One device, then came Canvas Unite and Canvas Sliver.

Towards the end of 2013, the brand made waves when it signed Hollywood star Hugh Jackman to endorse its Canvas smartphone. In 2014, Micromax partnered with Cyanogen (a discontinued operating system for mobile devices) to launch the Yu brand of smartphones.

2014 was the breakout year for Micromax. As per Counterpoint Research, it “became the leading mobile phone supplier brand in India in Q2 2014 for the first time ever, surpassing Samsung, capturing 17 per cent market share, up from 13 per cent in Q1 2014.”

It was also the second-largest smartphone vendor, with 19 per cent market share. Low-cost feature-packed phones helped the brand dominate India’s phone market.

Fast forward four years to 2018. Samsung was the leading smartphone vendor, with a 29 per cent share, followed by Xiaomi, Vivo, Oppo, Honor and ‘others’. A sneak at the feature phone shipments showed Reliance Jio dominating the segment, with a 47 per cent share, followed by Samsung, Nokia, Itel and Lava. Where was Micromax?

One major reason could be attributed to the launch of Jio network in 2016. Through its 4G services, Jio offered free voice and data at the start, and also launched an affordable 4G-enabled phone called JioPhone; available for a deposit of Rs 1,500 that is refundable after three years.

This impacted brands, like Micromax and Lava, whose feature phone segment took a hit, while their 3G-enabled phones at that time found no takers. Also, during this time, Chinese smartphone brands began to dominate the Indian market, with their 4G-enabled range of devices and a price range that suited most consumer cohorts.

An Economic Times report that said, “Micromax Informatics’ valuation has crashed about 93 per cent in roughly four years from a peak of Rs 21,000 crore in 2015 to less than Rs 1,500 crore…”, sums up its situation.

Also Read: What will the outrage against Chinese products, services do to brands, endorsements, media?

Micromax was pushed out of the smartphone segment, but now it has announced its return. Sharma, in the video, revealed his intention to reclaim lost ground from Chinese brands such as Xiaomi, Vivo, Realme, and Oppo which dominate India’s smartphone segment.

Micromax, as its first step of return, has announced the launch of a new smartphone series called ‘In’; a clever play on ‘In’dia and stoking the nationalist sentiment.

An NDTV Gadgets report quoted Sharma as saying that the ‘In’ range will feature devices that deliver a “value for money” experience, with competitive performance and nearly stock Android experience and the series will range between Rs 7,000 and Rs 25,000.

“This is the perfect time for Micromax to make a comeback,” said Lloyd Mathias, a business strategist and former Asia-Pacific marketing head of HP Inc. (He’s also worked at Motorola, where he was head of marketing for SW Asia region in 2005-06.)

Mathias remarked that there is growing border tension between the two countries (India and China). So, building around the theme of an Indian brand to counter Chinese dominance is a ready platform that Micromax seeks to capitalise on.

Mathias also said that it remains to be seen whether the launch of Micromax ‘In’ is only a clever tactic (capitalising on sentiments, or is backed by genuine Indian manufacturing and capability). That will determine the real impact of this comeback.

We were curious to understand what makes a brand Indian: birth or raw materials (Motorola handsets used to be assembled in China). Said Mathias, “These days, pointing to a brand's nationality is difficult, with transnational ownership of companies and global supply chains.”

He then said that a company’s founder may be from one country, and many of its shareholders may be from another. Its manufacturing and raw material sourcing can be from multiple countries, and consumers from across the globe. But in general, the core promoters and the place of incorporation largely correlate with the nationality.

The ad

The near two-minute video features Sharma evoking his middle class upbringing and the anti-China sentiment to push Micromax’s return.

As per Azazul Haque, chief creative officer, Mullen Lintas, “The brand is trying to encash the nationalist sentiment, which has been a successful formula for content creators. Bollywood has delivered many successes using the same nationalist narrative.”

He remarked that it may help the brand in getting share of mind, but it entirely depends on the product. Because even after the social media backlash, many Chinese mobile brands (handsets) sold like hotcakes.

“So, such a nationalist narrative will help the brand get attention for sure. But, it won't work until and unless the brand launches a feature packed phone at an extremely competitive price,” Haque signs off.