How Micromax Spiced up the market

23rd May 2011
  • +0
Share on
close
  • +0
Share on
close
Share on
close

Heraclitus once famously said that, “Change is the only constant” and the maxim still holds true. Nokia has held the number one position in terms of handset sales globally as well as in India ever since mobile phones came to the fore.This Finland based company has a global market share of around 28% (the figures range from 25 to 31% according to different sources) but all these sources point out at the winds of change. Nokia has seen a decline in its share which once was steady at 40%. Is it the writing on the wall or will Nokia bounce back and stamp its authority again?

Nokia

As per as national figures, Nokia had a very healthy market share of more than 55% but this figure has taken a beating in the recent past and is plummeting. This plummet is owing to the ingenious strategies of local companies like Micromax and Spice mobiles. The second place has been a slippery spot and has been taken up by various players including Sony Ericsson, LG and Samsung in the past decade. But Micromax is hot on the heels of Samsung and is looking strong. What is it that has worked for these local brands?Recognizing a need, targeting an audience, coming up with a product that served these needs and picture perfect execution is what has made them a success. On contrary to the established notion, Rahul Sharma’s Micromax entered through the rural market. They recognized the need of an affordable phone with a very high battery life as charging on a daily basis isn’t possible in villages. They developed a phone with a 30 day battery backup (on standby) with 17 hours of talk time at a very nominal price of Rs2150. This was snatched upon by the rural crowd and the X1i became an instant hit. They developed on that model and now offer a wide range of 23 models including phones with dual sim and qwerty keypad.

The other minnow, Spice Mobile took the nation by a storm with its “Subramanium is movie, almunium is movie” advert for the Spice Popkorn. This phone with an in built projector to view movies and documents on a larger screen had a feature to boast about and an equally good marketing strategy to go along with it.

The other factor working for these companies is the confidence of consumers. The initial impression of a Micromax or a Spice handset was not very different from that of a Chinese phone/Use and throw phones. But the consumer has matured and has now bestowed his confidence upon these companies. The middle class and upper-middle class have recognized the difference and have come to terms with owning a Micromax phone.

The challenge that lies before these companies is to compete with the multinationals when they foray into the high-end segment of mobile phones. And they will have to do it if they want a larger bite of the cake. These local brands currently have about 20% of the market share. Nokia still holds 50% of the market share but the figure is dwindling each quarter and Nokia needs to do some serious rethinking if they want to carry on with its supremacy. And it will have to be quick on its feet because these local brands headed by street smart entrepreneurs won’t go down without a fight.

  • +0
Share on
close
  • +0
Share on
close
Share on
close
Report an issue
Authors

Related Tags