Where did Micromax originate from and what country does it belong to? Read along to find out.
In the early 2000s, the Indian digital services and products startups started to boom and this brought a lot of change to the lives of many Indians. However, their Chinese counterparts with so much money pushed them out of the market while some were acquired, so these startups began to disappear a decade later. Micromax was an Indian company that succeeded during this era despite the challenges, but today it no longer exists.
Not a lot of people today know that Micromax is a huge brand that was associated with Samsung at some point just a few years ago. In this article, we will look at the key factors that led to the growth of Micromax.
Origin of Micromax
In the 2010s, Micromax gained fame as a mobile phone manufacturer. It originated in India and was founded in 1991 by Rajesh Agarwal, but it was not known as a phone company, instead, it was a distributor of computer hardware for brands like Dell, Sony and HP. It was later named Micromax Informatics. Rahul Sharma, Summer Arora and Vikas Jain joined the company in 1999. In the early 2000s, it was a software company known as Micromax Software and Rahul, who is a prominent figure in Micromax was introduced to fixed wireless terminals by one of his colleagues. This technology used sim cards which eventually revolutionized the sector because landline was the main form of communication in the 2000s. Micromax leveraged this technology at the right time and targeted rural areas since they did not have landline connectivity.
Soon enough Micromax began making exceptional phones that resembled landlines but used sim cards for Nokia. Nokia also appointed Micromax as the All India distributor for the Nokia 32s phone. But unfortunately, Nokia was sold off worldwide by Microsoft. They were still able to make profits when they took their technology to Airtel. They were initially tasked to set up payphones in J&K and then Airtel allowed them to expand to the rest of India. In 2007 when Micromax was at its peak they were planning to set up 250,000 devices.
The founders of Micromax at this time had started to get an experience of uncertainty, changing technology and they needed to stay innovative. This is when they decided to gear towards mobile phones.
Micromax’s entry into mobile phones.
While thinking of their next big move, Rahul Sharma noticed some villagers charging their telephones using a battery from a truck. He found this intriguing and went on to have a conversation with the truck driver. He found out that the truck driver makes a living this way. The truck driver would charge the battery in another village overnight and the next morning he would bring it back to help people power their phones.
Despite the electricity problem India faced, Rahul saw an opportunity that it would be a great idea to create low budget phones with a battery that lasted hours in India. The other founders were skeptical about this because the market was already dominated by Samsung, Nokia, LG and Motorola. However, he managed to convince them regardless and then they entered the market with this idea.
So Micromax made phones that the battery lasted for 30 days. The phones were manufactured in China by OEMs (Original Equipment Manufacturer), and then shipped back to India and marketed and sold by Micromax. Micromax depended on these OEMs and also started working with companies like Oppo, Gionee, Vivo and Coolpad to produce its phones in China. This move led to the launch of the Micromax X1i which was made in China. Rural areas were targeted because it was mostly affected by electrical problems.
Because they were new entrants in the markets, they couldn’t find a new distributor, so they turned to their existing distributor who eventually agreed. Micromax sold all of the 10,000 phones in only 10 days with the market requesting more.
Micromax did not only stop with producing the X1i phone, they also found an opportunity to make phones with multiple sims. Dual sims were uncommon at the time, so if you had one it meant you had two phones which was a sign of luxury. Micromax immediately took advantage of this technology with the launch of dual sims. They also launched Bluetooth enabled phones and phones made especially for girls. With these new entries, Micromax gained a foothold in the market that they had just arrived in.
Next was the call recorder, which was also instigated by Rahul when he met a painter who needed call recording features. Micromax was able to identify the needs of people and realized that it did not take too much to provide what the people needed.
In 2015, Micromax had grown so much that it was now bigger than Nokia in the Indian market. It became the second-largest smartphone company after Samsung. Micromax was valued at $3.5 billion in 2014 and it had about 40 phones priced between Rs5000 – Rs10000. They were also part of the first three local brands to introduce the first generation of Android phones. In Russia, it became a top 10 brand and had sellers in Dubai and Sri Lanka.
The fall of Micromax
By 2019, Micromax’s valuation had declined 90% from its peak in 2015. The conversion from 3G to 4G was highly underestimated in the Indian markets and as of 2015 people were still using 2G networks. So for any company to survive, they had to study trends and adapt to the timelines. When the Jio was launched, it completely changed the industry. People went from not having internet-enabled phones or 2G/3G phones to having 4G for free. Because of this, Micromax found itself fully stocked with 3G phones that were no longer needed.
The Chinese seized the opportunity to flood the markets when the Jio launched. This forced companies established in 3G technology to remove their inventory. The Chinese devices were also 4G compatible and had the support of superior financial powers and allowed them to offer retailers incentives to promote their products. The Chinese also took advantage of the eCommerce sector by forming partnerships with them.
Even though Micromax is no longer in the spotlight, it is still planning a return with the launch of “IN” devices.