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Micromax continues to struggle : Internally and Externally

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Couple of months ago, Micromax came to No. 1 spot by beating Samsung in indian Market. But the Real trouble started, when key executives started leaving Company and On other side, External factors started killing the market share , like,Chinese Manufacturers Xiaomi, Gionee, One Plus, Oppo and LeECO ( 2016 ). Samsung also joined the race by launching the J and A series, High specs at affordable prices and regained Market Share, and came back strongly to No. 1 position.

Apart from Chinese Brands, The major blow came in the form of Home grown Brand, Intex, which managed to capture around 11 % within a short span of time, and killed other Major Indian Brands like, Micromax, Lava and Karbonn. What Industry Experts have to add :

“What the Indian brands did to the global brands two years ago, Chinese phone makers are doing the same to Indian brands now, and over the next year we see tremendous competition for Micromax and other Indian smartphone makers.”

In 2015, Chinese Manufacturers almost doubled the market share to 18 %, As mentioned by Counterpoint Research, and killed the Indian Manufactirers such as Micromax, Intex, Lava and Karbonn. Indian brands’ market share fell from 48 to 43 per cent last year.

Internally, Micromax got some big blows when Top Executive left the company, like CMO Shubhodip Paul. In 2014, the founders brought in outside managers to lead the company at a time when Micromax was challenging Samsung to become the largest mobile phone maker in India.
But tensions arose soon after between founders and the newly hired executives, six former executives told Reuters.

That was basically because of the Owners conflict with the New Management Team over the Route to Market. Like New Management ( Sanjay Kapoor and Vineet Taneja ) wanted to adopt the latest Trend, while Micromax never wanted to go away from the Traditional Route.

Though, Micromax never realized this ” Yu was also another key reason, which killed the Brand.” Yu became much stronger name as compared to Micromax. Though , Yu Yureka was brought in to fight with Xiaomi, but it started cannibalizing it’s own Brand.

Apart from all this, Micromax got big blow financially, When Alibaba withdrew from the Funding the Micromax. On this funding basis, Micromax spend huge amounts on setting up R&D Center in Bangalore, but never paid serious attention due to financial Issues, and ultimately they were to close down the operations.

Alibaba was supposed to Invest around 1.2 Billion on a stake of 20 5 Share in Micromax. Internal sources revealed ( as reported by ET ), Lack of Vision and Long Term plan, forced Alibaba to withdraw from the race.

“We hired about 80-90 people in Bangalore to do in-house software and design, but with no money from the investors and little interest from the founders, that team fizzled away and that office has been partially shut down now,” said a former executive.

The way forward for Micromax is to strengthen the Brand in On-line Channel, Create differentiated Products like Xiaomi, strengthen Service support ( which is supposed to be not that great ), and expand globally. Though, Micromax is a well know Brand in some Asian and Russian Markets, but over the time, Micromax failed miserably in MEA Region.

At one point, Micromax took 20:20 on Board for spear heading the Brand in UAE Market, but could not establish. Let’s see, What future holds for Micromax, if the company fails to produce Innovative products.

 

 

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