Even as competition in the Indian smartphone is getting intense, Micromax is now planning to expand its business to another competitive market, China. According to Micromax co-founder Vikas Jain, the company is planning to enter China next year. He also revealed that the company plans to go public in couple of years and is aiming to increase sales and have more cash to sustain in the fiercely competitive industry, WSJ reports. While Micromax may be eyeing a bigger global presence, but will entering the China market help? Also Read - Micromax to bring a budget phone with price likely under Rs 10,000: Check launch dateAlso Read - Micromax In 2b, In 2c in the works: Listed on Geekbench ahead of launch
Apart from India, Micromax already sells its devices in Nepal and Russia, where it is one of the top smartphone vendors. In India, Micromax is the second largest smartphone vendor. According to a recent IDC report, the company had 12.6 percent market share of all smartphones shipped in India in the first quarter of 2016, a decline of 17.9 percent sequentially. Also Read - 5 delayed smartphone launches in India due to COVID-19 in May 2021
It is not just Micromax, IDC had also pointed out that the smartphone shipments in India had softened by 8.2 percent over Q4 2015, dipping consecutively for two quarters. The incumbent market leaders were facing a strong competition from new entrants like LeEco, and key Chinese vendors like Oppo, Xiaomi, Vivo and Coolpad had gained traction with their consistent aggressive pricing and marketing strategy.
China market is slowing down
The China market is unlikely to be a cakewalk for Micromax as it is already nearing a saturation point as the smartphone shipments have significantly dropped over the years. According to the IDC report, China’s year-over-year shipment growth, which was 62.5 percent in 2013 had dropped to 2.5 percent in 2015.
Chinese brands are dominating the market
Interestingly, three of the top five global smartphone brands are from China — Huawei, Oppo and Vivo, which have also expanded their brands to the Indian market. Even Apple had to shift its focus onto the Indian market after its sales slipped in China to 13.1 million devices in the first three months of the year from 16.2 million a year earlier. Other brands like Xiaomi and Samsung are strong too. Unlike India, where Micromax launched early and managed to gain a strong foothold, China doesn’t have any such vacuum for it to fill.
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Micromax has no differentiator
If you look at the Micromax s portfolio, it has nothing unique to offer than what the Chinese brands are offering. Though it has made an attempt with Around YU, an integrated shopping platform, but it is still in its nascent stages and far from perfection. In terms of content, the likes of LeEco and Xiaomi are already huge. In terms of hardware as well, Micromax smartphones don’t offer anything better than those by the likes of Huawei, CoolPad and Xiaomi, which offer competitive if not better specs at low-cost prices.
Micromax s plans to tap the China market look highly ambitious right now, especially considering the aggressiveness of Chinese brands, most of whom have their own design, manufacturing and supply chain. Many of these brands are Micromax’s OEMs and it is unlikely that Micromax would get any advantage especially in terms of pricing under its current model.
No Google services
With no Google services available in China, Micromax will also need to figure out an end-to-end services ecosystem. If it goes with white label solutions, it would be unable to differentiate itself.