Is Micromax secretly a Chinese Company?

3 Jan 2022  Read 1010 Views

An Indian smartphone brand, which once was a market leader with more than 50% market share, has a market share of 0.5% today.

Micromax was everything that any Indian wanted. Price lesser than all other brands, better battery backup, better specifications, keeping up with the software updates, until one day, it couldn’t keep up anymore. 

Micromax- Not a smartphone brand

In 2000, Rajesh Agrawal founded Micromax Informatics Ltd. It wasn’t initially a smartphone brand. Rather, it was established as an IT Software company operating in the Embedded Devices Domain; responsible for the distribution of Dell, HP, Sony. 

When Micromax was Micromax Informatics, it also handled the distribution of Nokia payphones. When Nokia sold its payphone business, Micromax came up with an interesting idea to continue in this business. They started importing Chinese phones that became obsolete there. Once they were here, they were rebranded, and after a few tweaks, Micromax started selling them under their own brand name. 

Chinese brands saw that their phones were accepted with open arms in India, so they did what Micromax did. A better branding and packaging, and they started selling under their brand name but with quite tight margins. 

Rebranding is better than manufacturing. Is it, though?

Micromax founders did not have much interest in innovating as much as they had in rebranding. It took them a few years to realize that the Indian market has a specific type of requirement that foreign mobile phone companies aren’t able to meet.  

In 2009, Micromax launched its first feature phone called the Micromax X1i. This instantly struck the right chords of Indian hearts. 

India, before a decade, was famous for long power outages, both in urban and rural setups. But in rural areas, it was worse. Every family had at least one phone, but there was rarely power to charge their phone, and when there was, it discharged very quickly, rendering the phones useless. The Micromax X1i had an 1800 mAh battery with a standby time of up to 720 hours. And a talk-time of 16 hours. Thus, an instant hit.  

Then there was no stopping this desi brand. Micromax then launched a series of smartphone models and tablets. 

In 2014, Micromax came in the top 5 smartphone brand, GLOBALLY.

But by the time 2014 ended, this rebranding thing was an evident problem. Micromax was not rolling out software updates and there were no customer service or service centre. People had grievances but no one was there to solve them. 

Micromax did build a few service centres later, but the experience was horrible. 

Even though these problems were piling up, Micromax had earned a good reputation and along with it, a considerable amount of money; an amount that would suffice to install a manufacturing unit and an R&D centre in India itself. 

But the owners were not very inclined towards this idea. So, they continued to import obsolete phones from China, rebranding them and selling them.    

However, Micromax did install an R&D centre. The company started operating in the smartphones business in 2008, but it wasn’t until 2014-15 that they hired engineers to build software and UI. 

Enter Dushman No.1 - XIAOMI

But in July 2014, Micromax’s competition- Xiaomi, was slowly spreading its wings in the Indian market. Xiaomi provided better specifications and better software, whereas Micromax barely rolled out software updates. 

Xiaomi already had an R&D team in place in China. They were bringing the best specifications at the cheapest prices.

Now, Indians had another option and not just Micromax. 

The one smart thing that Xiaomi also did was the multiple ‘flash-sale’ on e-commerce websites. Creating a shortage of technology that is best at that time and also the cheapest, all when the clock is ticking. Remember when these flash sales started? Within the first few minutes, they used to be ‘out of stock.’ 

Slow and steady, Xiaomi’s market share was increasing and Micromax’s decreasing. The below table will give you an idea about that. 

Source: Dazeinfo


Dushman No.2 - JIO

While Xiaomi’s little tricks were working wonderfully, another havoc was yet to be wreaked. Jio. 

Jio provided free calling and 4G data to every Indian. Naturally, every Indian wanted to use it. Who says ‘no’ to a free service? But, the only condition was that the Jio sim cards would only work on 4G phones, and not on 2G and 3G models. 

While Indians were celebrating free calling and data they had just received, things were heating up in Micromax’s board room. 

Micromax had ordered a considerable quantity of 2G and 3G models from China. The minute Jio rolled out its free services; the phones became obsolete. But Micromax thought of pushing sales of these phones. 

But, Xiaomi had already launched 4G phones in India even before Jio’s announcement. People’s obvious choice was a 4G phone with free unlimited data over a 2G phone with paid, very little, limited data. 

Thus, a complete shift. 

But things turned their course in 2020. 

When Covid happened, a withdrawal from all Chinese brands also happened. People were actively searching to replace the Chinese mobile phone brands with an Indian brand. But they found nothing, nada. 5 out of 10 most selling smartphone brands in India are of China; India needed a plan B. 

Micromax rose to the occasion and struck the right chords again. This time, of ‘desh bhakti’ and introduced the Micromax IN (IN for India). These smartphones were not only better priced, but their specifications are a competition to any other established brand. 

The Lesson? 

In November 2021, the Micromax IN phones were available to pre-order in Flipkart. Micromax claims that the phones were sold out within few hours. Micromax rose from to ashes to be the Phoenix it once was. 

Micromax’s market share in 2013 was 22%, in 2015, it was 13%, in 2018, it was less than 2.8% and in 2020, it was less than 1%.

Micromax IN is hopeful and entered the right time when Xiaomi and Oppo are moving towards flagship phones, leaving the budget category empty. Since these phones start from ₹7,499, there is a very good chance that it fill fill this void. 

This time, only if Micromax could not make the mistakes it did earlier, it could really pull it off. 

About the Author: Rishika Mukherjee | 13 Post(s)

Rishika is an MBA aspirant. She is an avid reader and loves to write as much as read. As Hazel Grace stated, she could read a good author's grocery list and so would Mukherjee. 

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