4 factors that impeded Micromax kingdom

Several Chinese phone companies have once again bounced back and Micromax along with other Indian smartphone makers are supposed to see a hard-hitting melee in the coming time.

Homegrown smartphone brand Micromax, which was touted as the market leader a year ago, leaving behind its international peers such as Samsung is now on a slippery ground. The market share of the smartphone brand has almost halved in mere one year. In 2014, Micromax saw an exponential splurge in its sales and was challenging Samsung to become the largest mobile phone maker in India.

But in last one year, the company has undergone several hiccups and has now slide to second position in Indian booming yet hyper competitive smartphone industry. Several Chinese phone companies have once again bounced back and Micromax along with other Indian smartphone makers are supposed to see a hard-hitting melee in the coming time.

Here are some factors that forced Micromax to shift to second position in the Indian smartphone horizon:

Management Tussles
At its peak time, the founders appointed outside managers to lead certain segment of company but couldn’t manage to keep a healthy work environment. Clash of thoughts started arousing between the founders and the newly hired executives. This further resulted in resignation of many senior executives including Vineet Taneja, company’s Chief Executive.

Shortage of Funds
These management conflicts further dented their efforts to raise funds as well. Chinese eCommerce giant Alibaba parted ways from the company citing loop holes in their growth plans and other future roadmaps. After nabbing the leadership position in the country, Micromax eagerly needed funds to keep the balls rolling but struggled big time in attracting new investors too. This economic slowdown hampered company’s research and design operations as well. Soon after hiring about 80-90 people in Bangaluru to do in-house software and designing, the company decided to partially shut it down due to shortage of funds.

The Chinese Show
With an intention of rapidly climbing the ladder to become the number one smartphone manufacturer in India, Micromax ignored its Chinese counterparts. As per a report from Counterpoint Research, Chinese phone brands almost doubled their market share to 18 percent and started taking over the grip from Indian budget phone makers such as Micromax, Intex and Lava. Shares of Indian brands felt from 48 to 43 percent by the end of 2015.

Chinese phone makers such as Lenovo, Xiaomi and LeEco played their cards by roping up lading eCommerce companies in India to sell their phones directly to consumers saving on distribution expenses.

Poor Brand Marketing
Despite cementing a pole position in smartphone industry, Micromax did not manage to gain consumer trust to the fullest. The company always tried to bet on its low costing strategy and thus never worked on affirmative marketing strategies. Many customers feel dicey before buying a Micromax phone because they have a very little testimony to read about.

India has moved over the perception of buying cheap smartphones and consumers (even in tier II and III towns) are now ready to spend a decent amount on their phones. Micromax will now have to move beyond its ‘cheap option’ image and start branding itself in the premium segment.

Micromax will have to regain the lost grip and whoop that fantastic growth figure one again. The company needs to be on its toes for a complacent road ahead and in order to climb further up the ladder, Micromax will have to reorganise its strategies from the bottom.

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