It is a tried and tested formula which was used extensively in the decades post India’s independence — selling products that are ‘Indian’ as opposed to those made by any ‘foreign’ firms. The fad of selling ‘Indian’ products seems to be in vogue again and across product categories let alone mobile handsets. Be it Samsung or Micromax, handsets are increasingly being marketed based on either ‘Made in India’ or ‘Made for Indians’ plank. Micromax is taking on the cash-rich rivals Apple (US), Samsung (Korean), Vivo (Chinese) and the rest by selling its handsets on ‘made for Indians’ message. And why not? After all Micromax is challenging the domination of Samsung India (that controls one-third) in the 22 crore-a-year mobile handset market in the country.
In its brand communication launched in April this year, Micromax, the contender, proclaimed: “...We’re not made in California. And we don’t have a fruit for a logo,” (a clear reference to Apple and other established brands). Last month, the Micromax raised the noise a notch higher when it launched Canvas Unite 4. The ad appeals to consumers to take pride in their respective native language and not look up to English. The copy reads: “…Toh pachad do iss angrezipan ko Naye Micromax Unite 4 series ke saath, Aur angrezipanti ko dikhao anghootha.”
For Micromax, the ‘made for India’ marketing plank has a sound basis. “We have a clear plan to manufacture all our phones completely in India by 2017. As on today, we are localising to the extent of 10 per cent of our total devices and are targeting to reach 20 per cent by end of the current fiscal year,” says Micromax co-founder Rajesh Aggarwal.
But all this noise does not trouble the mighty Samsung mobile. Samsung India is expected to cross the $10 billion revenue mark in India this fiscal, its mobile business is expected to contribute upwards of 65 per cent in revenue. Amidst all players, Samsung has over 60 per cent market share in the 4G market and around 30 per cent in the overall mobile handset market. “In the value smartphone segment, the GFK report makes Samsung Mobiles market share shot upwards from 35 per cent in December 2014 to 48.3 per cent in May 2016,” says Manu Sharma, V-P, Mobile Business, Samsung India Electronics. “With the new launches, we have gained more than 10 per cent share over the last year in the Indian smartphone market,” says Sharma.
On those selling handsets, appealing to the ‘Make in India’ plank, Sharma has an answer . “Our 2016 edition of Galaxy smartphones come loaded with ‘Make for India’ innovations such as S bike mode, Ultra Data Saving mode, Turbo Speed Technology and the smart glow technology among many other features,” says Sharma. Samsung points out the importance of India and the Indian market. “Besides a design centre in Noida, Samsung has the second largest research and development (R&D) labs in Noida and Bengaluru outside South Korea,” says Sharma.
But for the homegrown market leader and contender for the top spot — Micromax — the pride (or some may call it arrogance) of selling handsets on ‘made for India’ plan comes naturally. “Today, Micromax has become a brand the youth of India reckons with. We are very strongly poised and are gunning for the number one position in the Indian smartphone market by 2017,” says Aggarwal with pride. “We expect to sell up to 56 million mobile phones by March 2017, up 56 per cent from the 36 million handsets we sold in the last financial year (2015-16). We’re not only looking at being the largest brand in India; our objective is to get to being the fifth-largest from the 10th largest worldwide, he adds”.
Micromax claims to have always been profitable. It said it closed the year (2015-16) with $2 billion (Rs 13,600 crore) revenue which was up over 30 per cent compared to last fiscal. “We expect the revenue to climb about 40 per cent in this financial year, backed by some 50 phone launches this year,” says Aggarwal. But why is Micromax a successful handset brand? “Micromax is a product of competition. Innovation has always been at the core of our DNA,”says Aggarwal.
In April this year, Micromax announced that it planned to invest Rs 2,000 crore for expansion over the next five-six years in Hyderabad, while opening its new manufacturing facility there. Micromax is now targeting a 25 per cent growth during 2016-17 to achieve revenues of Rs 15,000 crore. The revenue in 2015-16 was Rs 12,000 crore, the company said.
ashish.sinha@businessworld.in
BW Reporters
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
