Micromax looking to enter China soon - Mobile World Live

Micromax looking to enter China soon

02 JUN 2016

LIVE FROM RISE 2016, HONG KONG: India’s Micromax, with ambitions to be a top-five smartphone vendor globally by 2020, understands it must expand into the world’s largest market, China, to break into the club.

Speaking this morning, co-founder Vikas Jain said: “We are in the second largest market, and we’re not afraid of being in the largest market as well, so you might see Micromax launching in China sometime soon.”

He pointed out that all of the top players are present in China. “So unless we do that, the top five will elude us.” The company is exploring expanding into one or two new markets in the next 12 months, but he didn’t specify which.

Jain said the nine-year-old firm is “fortunately profitable” and is not close to raising new funding. “There is no pending requirement to raise funds, and we’ve actually started to invest in the wider ecosystem.”

But he is open to a strategic alignment, with a possible financial injection from a partner. “But a pure financial partner wanting to put in X billion dollars isn’t something we’re looking at.”

The privately held firm, which has four founders, is less than 24 months from being listed either “on market or off-market”, he said. “The company could do with more cash coming in, which would accelerate growth as we look for acquisitions and invest in startups. We’ve been growing quickly, but there’s more we can do.”

China design team
Its design team is based in China because the major components are first released in China before they come to India. “We do leverage the Chinese ecosystem a lot. If my design team was in India, I would probably get access to the electronics 60 days later.”

The handsets are assembled in India. It has set up two manufacturing plants in the country, which account for about 50 per cent of sales, with the rest imported from China. It is aiming to make all models domestically in 12 months and then to start exporting.

Micromax is the second largest smartphone vendor in India after Samsung and faces increasing competition from local as well as new players from China.

He said the industry always hears about new brands launching in India, but there is probably an equal number that have shut shop, noting that brands from outside of India have had a low success rate, with many lasting only about 18 months.

With a market size of 250 million units a year and the lifecycle of a smartphone dropping to about 15 months, he said there is a 100 per cent upside to the industry. “So while I need to be watchful of the competition, it’s equally important to see the early opportunities by focusing on the consumer and see the next thing the consumer wants.”

The company releases 35 to 40 handset models a year, adjusting specs to offer devices with a gap of just $6 between models targeted at different groups.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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