lawas blogs: [www.keralites.net] Micromax Indian Mobile handsets sells 18 lakhs units a month

We never thought we would sell 1.8 million handsets a month: Micromax co-founder

Vikas Jain, one of the four co-founders of Micromax

Sudhir Shetty | DNA

Micromax was the first among a handful of Indian brands to challenge the dominance of European handsets maker Nokia, which used to enjoy over 70% market share in India. By early 2010, Micromax was counted among the top 4 handset sellers in the country by some analysts. The company, founded by four engineering college friends — Vikas Jain, Rahul Sharma, Rajesh Agarwal and Sumeet Kumar — used product innovations such as the 30-day battery back-up phones and dual SIM phones to capture the minds of a rural audience, which had relatively less brand preference. After cementing its dominance in the hinterland, Micromax unleashed a branding and marketing campaign in urban India, making sure to use advertising vehicles like international cricket tournaments. It even tied up with MTV for co-branded phones to garner Indian youth's mind share. All that seems like history, when contrasted with the company's expansion to nearly 10 countries outside India. Vikas Jain, one of the four co-founders of Micromax, talks about the journey so far and the vision for the future, in an interview with DNA. Excerpts:

How is Micromax's foray into markets outside India doing?
We started with Nepal, then Bangladesh and finally Sri Lanka. On an average, the Saarc region is doing about 1,50,000 handsets per month. We are looking at ramping up, but honestly, we have only been around a year or so in these territories. We are still learning the local nuances in terms of customer tastes, etc. Numbers are looking good, and we have reasonably good market shares, and as a brand Micromax has reasonably a good brand recall among the local consumers.

We just did a soft launch in Brazil, where we have got approvals for three of our products and we will do a commercial launch very soon.

In the Middle East we are operational in five markets. We are in Kuwait, Oman, Qatar, United Arab Emirates and just launched in Afghanistan. You will hear something on Africa shortly.

Is the competitive landscape in Saarc countries much different from India?
It is pretty different. I wouldn't say very different. Bangladesh is still like how Indian market used to be five years ago. They are still focused on the entry level handsets and looking at how low these can go. So as of now, the average selling prices (ASP) are still pretty down south, but I believe once the replacement cycle kicks in, the ASPs would start looking north. Especially, with 3G launch in some of these markets like Bangladesh. It will give a whole new impetus to the replacement demand. Sri Lanka has had 3G for over a year now and a decent 3G traction with 20% penetration among subscribers, which is reasonable.

My team tells me that Micromax is second after Nokia in Sri Lanka. I have not got this corroborated with a third party auditor. But, it will be foolhardy for me to say that we are not competing with Nokia, especially as we believe that they are the only one above us. I am also given to understand that our ASPs are higher than that of Nokia in Sri Lanka.

How is the India story playing out, in particular the urban journey?
Honestly, if you asked me when we started, I wasn't expecting to sell 1.8 million handsets a month. Nobody expected it. But the growth is panning out quite well. We are roughly at `2250 crore topline. After the rural success, there was a shift to urban. It was more of an integration. I think we stitched the rural and urban story together pretty seamlessly. There is reasonably good brand recall now. So there is a high degree of brand acceptance.

The next would be to come out with form factors and products that have a wow! factor. Smart phones will be a large part of our strategy going forward. We have desisted from that category so far, largely because India was predominantly a 2G environment. But now with the operators launching 3G services across circles, the time is right to start getting into the smartphone segment. You will see a lot of smartphones being launched by Micromax. I will not be able to discuss right now what would be different, but let me tell you that we would have very differentiated products. We will have features that will differentiate us from competition very distinctly, and I am not even talking about price, which has always been in favour of Micromax customers. It will be the wow! factor.

This is not to say that we will ignore our feature phone segment. We have a pretty good road-map there as well. Some of the innovations we have been working on for quite some time are now getting ready for launch. Next three to four months is going to be very very exciting.

How would you define differentiating, especially on Android platform, because except for the form factor and the underlying hardware most competitor phones have more or less the same look and feel?
Until now, barring the screen size and the form factor, everything else is pretty much the same across different competitor products. I will not be able to share much detail, but I can tell you that it is going to be a fad. It is going to be a complete experience. It will be a factor of both hardware and software. We will be there with the product before Diwali. We are going to be there with a bang for the festival season and I can tell you this is going to be the most talked about product this Diwali. Even on the price front, I would not be competing with anyone on this particular product. It would be quite unique and it will be unique even if you were to compare it with one of the Apple products.

What is happening with the India manufacturing plant that Micromax started talking about almost a year ago?
The project size, for the manufacturing plant, is about Rs224 crore. And that is linked to our fund raising/initial public offering (IPO), which is now in a state of flux given the current market conditions. Let's be honest, the market is in such a state that nobody wants to take a call on which way it is going to go.

Ravi

www.keralites.net

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