History of Micromax

The history of Micromax (2011-12 revenue: Rs 1,978 crore or Rs 19.78 billion), which entered into the mobile phone market in 2008, is one of the most fascinating success stories in the Indian consumer electronics industry. In a very short span of 5 years, the company has taken up the third position (by volume) in the mobile handset market in India and is at No. 12 globally. It is a leader in the Indian tablet market with 18.4 per cent share, beating industry giants like Samsung and Apple.

Micromax was incorporated as Micromax Informatics Ltd. on 29 March 2000. They started manufacturing mobile phones in 2010 with a focus on low pricing, in order to compete with international brands. Everything started with a truck battery in the year 2007. In the powerless city of Baharampur in the Indian State of West Bengal, Mr. Rahul Sharma saw an AirtelPay Phone being powered by a truck battery. Every night, the PCO owner would lug the battery 12 km to an adjoining village on his cycle, charge it there overnight, and lug it back to Berhampur in the morning. Rahul was fascinated by the nature of innovative adaptation to suit the difficult conditions which the payphone operator had employed and his interest only grew when he found out that to everyone’s surprise, the operator was also able to earn a tidy sum of money. Based on this experience of innovation arising from constraint, Micromax soon launched its first phone with a month long battery back-up known as X1i.
Indian mobile phone market was dominated by leading international phone makers, including Nokia, Samsung, LG, Sony Ericcson and others when Micromax first set foot in the industry. It entered with a motive to differentiate itself by adding Indian flavor to the products. While undertaking research to find what customers wanted, it realized that even the top players are not providing what is needed by the people. Micromax acted fast and grabbed this oppotunity. It presented its phones with features that were not available in the existing products. So, Micromax launched its first mobile phone whose key selling point was a battery that lasted 30 days. In a country that suffers from chronic power deficiency, this was an invaluable proposition.
Micromax, with its headquarters at Gurgaon, has taken over the country’s mobile market with its innovative products that fits everyone’s pockets. It owes its success not its products or the speed with which it puts new designs on the shelves but to how it has managed these two crucial product inputs by leveraging China. To be more specific, the labor cost advantage and the production flexibility that China offered.
Rahul Sharma, co-founder, Micromax, had said: "The strategy is simple: create high volumes, reach the customer base through effective distribution, give them products that are innovative and cost-effective. Finally, create a strong brand." Micromax has set itself apart by the speed at which it has been able to put products in the market and its tremendous reach. It has also priced it products so that they are easily affordable by common people. So that they can enjoy high standard features at lower costs.

Venturing New Options
Micromax's focus these days on is building its manufacturing infrastructure in India. Micromax believes itself to be a consumer durables company diversifying into other categories. Micromax's facility in Himachal Pradesh already manufactures television sets and some tablet models. It does not want to be just another 'fringe player' that manufactures products in China and sells them in India. It wants to create a different image for itself, as a major player, venturing into many new areas. And since labor cost in China is raising at an alarming rate, it can manufacture a wide range of goods, with moderate levels of labour content and high logistics costs.
“There are many hidden factors involved in sourcing heavy appliances from outside suppliers," says a senior marketing executive with an appliances company. "These variables include greater supply chain complexity, longer cycle times, quality issues and responsiveness to local demand. A local supply chain makes it easier for a company with a wide portfolio to respond to any sudden supply chain disruption or other unpredictable event." In such a scenario, indigenous products would not only guarantee good quality, but timely supply as well. Many global players are setting up and growing their own facilities or scouting for opportunities in countries such as Vietnam, Indonesia and Cambodia to have greater control over cost and quality. Micromax is following the same path which would provide economies of scale. Ultimately, analysts believe that the correct balance can be struck through careful planning. And while Micromax grapples with supply chain issues, what works in its favour is that it is no longer a single product company and faces dilemmas that many other brands confront.

* Abhilasha Ojha February 4, 2013-How Micromax used China to build its business http://www.rediff.com/business/slide-show/slide-show-1-tech-how-micromax-used-china-to-build-its-business/20130204.htm#8 * http://en.wikipedia.org/wiki/Micromax_Mobile