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Micromax Plans China-Entry in 2017 to Compete with Oppo, Xiaomi, Lenovo and Huawei

Micromax Plans China-Entry in 2017 to Compete with Oppo, Xiaomi, Lenovo and Huawei

While Chinese companies like Lenovo, Xiaomi and Huawei have set their base in India, and newer ones like LeEco taking the market by storm, India’s leading handset maker, Micromax is planning to enter Chinese industry in two years.

Vikas Jain, Co-Founder – Micromax Informatics told WSJ, said that the company is looking to enter China in 2017, and hopes to become the world’s fifth-largest smartphone maker by 2020.

At the Rise Technology conference in Hong Kong, Vikas said, “The company aims to become the world’s fifth-largest smartphone maker by number of phones sold by 2020, and can’t do that without access to Chinese consumers and more cash from a public offering or private investors.”

Micromax unveiled a new logo and tagline for its customers earlier this year, in hopes to create global image and a bolder outlook to the company. In recent times, Micromax phones have not been selling too well like their Chinese counterparts in India, and there are other issues too like upgradability, hardware and software staleness.

The co-founder also said that the company will raise funds, either privately or by going public, to improve its presence in countries other than India, specially China.

Biggest hurdles for Micromax in China

Chinese companies like Xiaomi and Huawei are themselves facing trouble in their homeland, thereby turning to other developing economies like India and Southeast Asia.

Xiaomi has reported a stagnant growth in 2016, as it had entered the market when Chinese smartphone market was growing. Huawei, the second largest player in China, also saw a very dim 2015 as compared to 2014, while Apple in China also did not receive as many sales as predicted.

According to a report by IDC, China’s year-over-year shipment growth declined from 62.5% in 2013 to 2.5% in 2015. However, the average selling price of the phones increased, indicating more buyers are looking for smartphones with good specs and longer usability.

At a time when Chinese market is slowing down, it does not make sense for a foreign company to launch products in China, especially when there is nothing more to offer. Exports and shipments of products seems to be the resort for most Chinese smartphone players since they’re the only ones bringing margins to the companies.

Micromax is itself struggling in India with the like of Motorola, Lenovo and Huawei, and faces fierce competition from Xiaomi. Yu Televentures, subsidiary of Micromax, has received better response, but the quality of phones lets the features down.

Excessive competition in China, along with stagnant market will make it extremely difficult for Micromax to make a mark in the country, with hopes to come in top 5 manufacturers in the world.

Source: WSJ


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Abhishek Joshi :Abhishek is working as an analytics consultant in Gurgaon. He has a passion for tech journalism and loves to explore and play with new smartphones.