This Reuters link saysthat last year Micromax was beating Samsung Electronics in India in terms of selling smartphones, but now its market is reduced half of that size. I remember the market was flooded with affordable but high on specs smartphones. The same specs that you could get in an expensive Samsung phone, at a bit lower quality, and lower prices, you could get in a Micromax smartphone. According to the above-linked report, not just the company’s market share has nearly halved, its top executives are leaving the company in hordes and the company is trying to sell its hardware in other countries. What lessons can you learn, as a technology company, from the Micromax decline?
There could be many reasons – many reasons we don’t know of, but as a general observer, I would say as long as you can provide something that the others can easily provide, you are going to operate on shaky ground. In the beginning Micromax smartphones, and to an extent even tablets, were a novelty. There were these smartphones that looked sleek, ran advanced versions of Android and to an extent even durable. Suddenly you would see many people, even those who would otherwise have never purchased a smartphone of such specs (and didn’t even have use for them for that matter) were seen using seemingly high end phones.
The report says that it is the lack of vision that is hastening Micromax’s decline as a leading smartphone brand. They were planning to have an in-house R&D department which didn’t work out because investors like Alibaba.com pulled out. Initially you can grow as a cheap smartphone company by sourcing components from Chinese manufacturers but if you want to compete in the big league of Samsung, LG and Apple, you need to make a unique offering and that you can only do by having your own development team.
Another problem with Micromax is that now Samsung is also flooding the market with cheap phones and as per the Indian mentality, people would rather buy a product from a known, international company than from a local company provided the international brand is cheaper or just slightly expensive.
It’s not just Samsung that is out-lower-costing Micromax; after Micromax there have been many companies like Xiaomi and OnePlus that are not just providing better -looking smartphones, but also carry out aggressive promotional campaigns, partnering with various online retailers. You don’t see such marketing from Micromax.
Another lesson that can be learned from Micromax is that when it comes to selling things at a lower price, there is no limit to how low your various competitors can go. For example, the very same companies from which Micromax sources smartphone components are selling smartphones in India now. If they can directly sell their smartphones and other gadgets, why would they do it through Micromax?
Micromax, half-heartedly, also launched an expensive range of smartphones but since it has already made a reputation of a manufacturer of cheap phones, people wouldn’t like to trust the company for in higher-end phone. As a brand Micromax is already known for a company that sells cheap phones. So if you are spending money on an expensive phone wouldn’t you like to spend the money on a company that sells expensive phones rather than a company that sells cheap phones?
So instead of exclusively focusing on the “cheap” smartphone market, just like any smart phone company, Micromax should have provided quality smartphones that could compete with international brands. This is what Apple does. The iPhones are not better than Samsung phones but there is an elite value attached to almost all Apple products and despite being unnecessarily expensive, the moment the launch a product, people lap it up.