The Trials & Tribulations Of Micromax In India

Indian smartphone vendor Micromax Informatics has come a long way since 2010 when it took its first tentative steps in the world of Android smartphones by launching the oddly-shaped Andro A60 with a low-res 2.8-inch screen, a single-core 600MHz processor and Android 2.1 Éclair. While those specifications are not much to write home about, the main attraction of the handset was it price-point, making it an affordable option for people looking to switch from their feature phones and jump on the smartphone bandwagon. The device, marketed with the tagline ‘My First Android’, went on to become a standout success with students and youngsters, paving the way for the Micromax brand to become a household name across the country.

While the company has grown in leaps and bounds since then, last year it suffered a huge setback, with many regulatory, commercial and technological changes forming a perfect storm that the company is still trying to recover from. Having initially benefited from the open market economy by importing products from China and marketing them in India under its own brand without having to spend on R&D and manufacturing, Micromax got a rude awakening last year when various Chinese companies like Xiaomi, Vivo and OPPO started selling their own high-spec'd smartphones in the country at attractive prices. As if having to compete with a multitude of super-aggressive Chinese vendors wasn’t bad enough, the company also faced severe jolts from unexpected quarters.

The launch of Reliance Jio, which initiated a mass migration of subscribers from 3G HSPA to 4G LTE seemingly overnight, was also a hard pill for Micromax to swallow last year. The migration to Jio may have been from Airtel, Vodafone, Idea and BSNL in theory, but it affected domestic smartphone brands - including Micromax - just as hard as the incumbent carriers, because none could predict the voracious appetite for super-fast data among the Indian populace. With most Indian vendors – unlike the Chinese ones – still offering only 3G handsets at lower price-points, the emergence of Jio meant that buyers started opting for foreign brands instead of Indian ones, resulting in a dramatic loss of market share for companies like Micromax, Karbonn, Xolo, Lava etc.

As if the migration to 4G wasn’t bad enough for Micromax, in November 2016, the Indian PMO (Prime Minister’s Office) issued a highly-controversial executive order, which affected many businesses in the country adversely. The order, issued without any warning, demonetized almost 85% of all federal banknotes in circulation in a supposed attempt to nab tax-evaders. While proponents and opponents of the executive order continue to argue passionately about how much it will help or hurt the economy in the long run, most seem to agree that the short-term consequences for small businesses and daily wage-earners have been nothing short of disastrous in a country where a large majority of financial transactions are still done via cash. Micromax, like most consumer-facing companies patronized by the lower-middle and working classes in the country, was blindsided by the demonetization drive, and is still reeling from its after-effects.

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