INTRODUCTION

Micromax is

an

Indian Consumer

Electronics company

located

in Gurgaon, Haryana, India. It focuses on the manufacturing of Mobile Telephones, Tablet

Computers, 3G, Datacards and LED Televisions. It has 23 domestic offices across the
country and international offices in Hong Kong. Presently, the company has about 656
employees.
Micromax started as an IT software company in the year 2000 working on
embedded platforms. In 2008, it entered mobile handset business and by 2010 it became
one of the largest Indian domestic mobile handsets company by offering unique affordable
innovations. This transformation was steered by four friends who divided responsibilities
on functional lines, which havent changed since: Rajesh Agarwal, Rahul Sharma, Vikas
Jain, and Sumeet Arora. Through its emphasis on adapting to the changing market
dynamics, introducing feature-rich phones and smartphones that are innovative and
unique, Micromax has today become a brand t o reckon with. The company has a 22%
market share in the smartphone segment in India As per IDC Asia/ Pacific Quarterly
Mobile Phone Tracker 2013 Q2 for August 2013. The brands product portfolio has more
than 60 models today, ranging from feature rich, dual SIM

phones,

3G Android

Smartphones, TabletsPC's, LED Televisions and 3Gdata cards. The company has many
firsts to its credit when it comes to the Mobile handset market including the 30-day battery
backup, dual SIM, QWERTY Keypad, UniversalRemote Control Mobile Phone etc.
Micromax has presence in more than 560 districts through 125,000 retail outlets in
India The company has sales presence spread across Bangladesh, Sri Lanka and Nepal.

CUSTOMER ACQUISITION AND RETENTION

Providing better after sales services through increased warranty of 2 years, thereby
making the customer think of reliability of our product.
Exchange offers will also be a major tool for customer retention as the customer
will be getting additional discount on the new Micromax phone he buys by exchanging the
older one. Thus this will help create a chain of transactions with customers.
Micromax considers 'After Sales Service' as a key differentiator for Micromax products.In
order to deliver prompt and easily accessible service, Micromax India has set up
awidespread network of company owned as well as Authorized Service Centers to
serviceits customers. Customers also get a chance to see the Micromax range of products
andinteract with Micromax product specialists to know more about the companys
products and services. Micromax is also increasing, the number Micromax Prestige
Service Plazas in smaller cities like Ludhiana & Coimbatore to reach out to its
customers.To satisfy the needs of its Home Appliance customers, Micromax has set up
state-of-the-art Home Appliance Service Centres in 19 cities that are equipped with latest
testing and measuring equipments for servicing only Home Appliance products. Speed,
Smile, Sure is the motto for Micromax Service, as the Company seeks to satisfy more and
more of its customers with prompt and accurate service. The company adheres to a
turnaround time of 24 hours within the city where the Micromax Service Centre is located.
A Service Helpline number 30308282 gives access to Micromax Service throughout the
country.

Micromax India organizes a Free Service Camp on an All India basis, every

year, for proactively reaching out to customers and servicing their Micromax products.10
second to loose a customer, 10 years to gain them back forms the guiding
principle for Micromax Service Team as it strives to satisfy the growing

expectations of Indian customers

CURRENT REPORTS
MICROMAX THREATENING SAMSUNG'S DOMINANCE:

As anticipated, Indian smartphone player Micromax has started eating into the market
share of Samsung, which presently rules the Indian market.
According to a report by IDC, Micromax's market share surged to 22 percent in the second
quarter from 18 percent in the previous quarter. It's notable that Samsung's market share
came down significantly to reach 26 percent from 32 percent in the first quarter.
Going by the current pace, it is a possibility that Micromax will surpass Samsung to
become the leading player in the country. Besides Micromax, other domestic players such
as Karbonn and Lava also managed to raise their respective market shares.
The market research firm said that Micromax crossed the two million units mark in
shipments. The Indian smartphone market has been catalyzed by the availability of
affordable big screen smartphones--the category where Indian players are aggressively
strengthening their bids.
While Samsung share is on decline, it will also be a challenge for Indian players,
especially Micromax to sustain the growth in terms of market share, since Samsung has
increased its focused in the mid- and low-range smartphone segments. The report noted
that Samsung's newly launched Samsung Galaxy Star was bringing in huge volumes at the
low end. The other mid-tier smartphones also helped Samsung cater to the wide range of
smartphone consumers in the Indian market.

Although, Samsung offers very few phablets in the category, for future growth it would be
important for the company to roll out more big screen devices.
Overall, the India smartphone market almost tripled its shipments year-on-year (YoY) in
the second quarter of 2013. IDC's AP Quarterly Mobile Phone Tracker reveals that vendors
shipped a total of 9.3 million smartphones in 2Q13 compared to 3.5 million units in the
same period of 2012. In 2Q13, shipments grew by more than 50 percent over the units
shipped in the first quarter of 2013.
The smartphones in the 5.0 inch to 6.99 inch screen size range, or the phablets, grew 17
times YoY and the phablet share has steadily risen to 30 percent of the smartphone market
in 2Q13.
The growth in the India smartphone market is driven by consistent performance by local
vendors who accounted for more than half of the total smartphone market in 2Q13.
These vendors have been scaling up operations owing to rising migration of the user base
from feature phones to smartphones, says Manasi Yadav, Senior Market Analyst with IDC
India.
The research firm also noted the trend of dual-SIM smartphones, coupled with big screens,
in the affordable segment. "The key for growth in this market, as with most emerging
markets, is a low-priced phone equipped with a large screen and dual SIM slots," says
Kiranjeet Kaur, Senior Market Analyst with IDC's Client Devices group.
The dual SIM phenomena, which had accelerated the growth of local vendors in feature
phone, turned to dual SIM smartphones flooding the Indian market. Topped with an
attractive sub-US$200 price tag, these smartphones are highly attractive," she adds.

According to IDC, the share of sub-US$200 smartphones in 2013 accounted for two-thirds
of the total smartphone market.

CANVAS 4 REVIEW: THE BEST MICROMAX SMARTPHONE YET

The phone market in India is in the middle of a transition. People are moving from feature
phones to smartphones. This means a great opportunity for smartphone makers like
Micromax, which were nobody in the old market but have potential to be a major player in
the new one.
In fact, Micromax is already a big smartphone company in India, at least in terms of
volumes. IDC says that with a share of little over 18%, it is the second biggest company in
the Indian smartphone market behind Samsung.

SAMSUNG VS MICROMAX: THE HOME-GROWN MOBILE MAKER IS NOW NO 2

IN DOMESTIC SMARTPHONE MARKET

A recent study by a research firm reveals that domestic mobile manufacturer Micromax
has acquired the No 2 position in the Indian smartphone market.According to the
Information Distribution Companies study, Micromax has a market share of 22 percent
while Samsung is at the top with a market share of 26 percent.
In a competitive and price-sensitive emerging market like India, rise of the home-grown
mobile maker is matter of great achievement as the smartphone segment is fraught with
reputed brands like Samsung with Galaxy series, HTC with HTC One series, Nokia with
its Lumia range of smartphones and Sony having Xperia.

With the success of its Canvas series, especially Micromax Canvas 4, and some other
budget smartphones, the Gurgaon-based handset maker aims to dislodge Samsung from
numero uno position in India.
The IDC study also reveals that domestic smartphone brands are half of the all
smartphones shipped into the country which is the third largest smartphone market in the
world.
Low-cost handsets with feature like dual-SIM are the USP of local smartphone which
global brands seem to have missed in India. People upgrading from feature phone to
smartphone make their buying decision based on value for money rather than brand
reputation.

SAMSUNG VS INDIAN BRANDS: WHY MICROMAX, KARBONN ARE STEADILY

GAINING

Indian

mobile manufacturers are putting up some tough competition for big brands like

Samsung, Nokia and Sony as the latest numbers from the International Data Corporation
(IDC) show. The Q2 numbers for 2013 are out and what is noticeable is that Samsung,
which in Q1 of 2013 had a market share of 32 percent is facing some serious competition
from home grown vendors such as Micromax and Karbonn. Samsung is still number one in
the Indian smartphone market but its share has fallen to 26 percent. Micromax is the
biggest challenger to Samsung with nearly 22 percent market share. ( the company had 19
percent market share in Q1) Micromax also shipped 2 million devices this quarter and its
Canvas range has done well to boost the companys volume share. Karbonn is at number
three with a 13 percent percent market share.

MICROMAX MOBILE ADVANTAGE

Four years after it was first recommended, mobile number portability still remains a paper
concept. Yet for over nine months, Saurabh Raina, a 43-year-old employee with a
switchgear manufacturer from Bhopal, is choosing the best monthly plans on offer across
six different GSM operators while he can be reached on the same number he has had for
over seven years.
The key lies inside his mobile phone a full-keyboard (QWERTY) model called the
Q3 that supports two active GSM SIM cards at the same time. One of these he keeps
constant as his incoming number to receive calls, while the other, he changes at will
depending on which operator offers him the best tariffs.
This dual-SIM feature is today present in 20 to 30 percent of all mobile handsets sold
in India, estimate experts. Yet market leader Nokia does not have a single dual-SIM
handset in its vast repertoire of phone models for India. And the company that made
Rainas Q3 Micromax Mobiles offers this feature on 22 out of the 26 phone models
it sells in India. The Q3 itself, though fancy looking, costs only Rs. 3,700.
Micromax is now Indias third-largest GSM mobile phone vendor with a market share of 6
percent after Nokia (62 percent) and Samsung (8 percent), according to research firm IDC.
It sells anywhere from 700,000 to one million mobile phones every month. And by its own
estimates it is now selling nearly Rs.1,500 crore worth of phones annually.

We are not the poor cousins of Nokia, says Vikas Jain, one of the four friends who
together started and grew Micromax to its present position. Instead we will force Nokia to
launch newer products to compete with us.
The guys at Micromax have two aces up their sleeve a keen eye for what the customer
needs, and the ability to swing their supply chain.
Though the company started making mobile phones only in 2008, it was founded in 1991
by Rajesh Agarwal as a distributor of computer hardware for brands like Dell, HP and
Sony. In 1999 three of his friends Sumeet Arora, Rahul Sharma and Vikas Jain
joined him as equal partners in the company.

Agarwal, the eldest of the four, keeps a handle on the companys finances. The quieter
Arora, a class topper, is the companys chief technology officer. Jain manages
Micromaxs alliances and partnerships with other companies. And the tall and fashionable
Sharma is the risk taker with the big ideas.
It was Sharma who convinced the others, after nine years of selling computers, software
courses and fixed wireless public phones (PCOs), to enter the crowded mobile phone
market. The companys first phone, the X1i, was born from the realisation that many
Indian villages and towns didnt get enough electricity to even recharge a phone daily.
Catering to a Need By increasing the size of the battery to 1800 mAh, Micromax was
able to tout a standby time of 30 days for the X1i. And at the rather affordable price of Rs.
2,150, the phone was a big success in rural India.

The unexpected success of Micromaxs first mobile phone taught the four friends two key
lessons. One, If you give people something that helps them in their day to day lives, they
will buy it, says Sharma. Two, even though there were over 50 companies selling mobile
phones in India, with Nokia alone dominating over 60 percent of the market, there were
features, niches and categories that could be carved out by a new entrant.
We knew that competing on price along with Nokia, Samsung or LG would not get us
anywhere. Instead we wanted to create, and own, categories, says Agarwal.
The friends realised that intense competition among mobile operators for subscribers
would inevitably lead to multiple connections per user. But carrying two phones around in
your pockets wasnt something most people fancied.

The seemingly obvious solution handsets that accept two SIM cards simultaneously
became Micromaxs second killer category.
Micromax neither had the brand awareness of a Nokia that would lead to customers asking
for its phones from retailers, nor the clout to force massive volumes through distributors.
Yet it also saw that commissions given by phone manufacturers to their channel partners
were often very low, leading to a lot of dissatisfaction. This is what they decided to
capitalise on. Nokia usually gives a channel margin of 2 percent, of which 1 percent is
usually given away as discounts. The remaining 1 percent cannot sustain any business,
says Agarwal. Nokia could not respond to Forbes Indias queries for this story within the
stipulated deadline.
So Micromax decided to give a 5 percent commission to each of its distribution chain
partners the 34 super-distributors, the 450 distributors and the 55,000 retailers. But

there was a catch it would not offer any credit. Instead distributors are expected to
complete an online bank transfer to Micromax before getting any of its phones to sell
further on.
As a result we are not plagued with dead inventory, periodic schemes or issues around
price protection. The retailer only picks up what he sees demand for. And because their
money is involved, partners tend to work harder, says Jain.
But having a lean, cash-based supply chain means Micromax has to be much more
accurate and faster in its forecasting as compared to its bigger competitors.
Naveen Wadhera, a director with the $16 billion private equity firm TA Associates, finds
Micromaxs supply chain one of its real strengths. Their time-to-market from the design
to production stage is around three months as compared to the 18 months taken by larger
guys, he says. TA Associates recently acquired an undisclosed stake (though less than 20
percent) in Micromax for $45 million, valuing it upwards of $225 million.
Still there are more sceptics than believers in the company.

Disproving the Disbelievers

Its sceptics say Micromax rise has been fuelled to a large extent by the Indian
governments decision to bar illegally-imported Chinese phones that lacked an identifying
IMEI number. As consumers rushed to replace their cheap Chinese phones, many opted for
the relatively cheap Micromax ones.
Others say without a strong consumer brand or control over its own distribution, it has no
competitive advantage in the long term.
One way Micromax is responding is by committing to invest Rs.100 crore on marketing
over the next two years. It has also signed up Hindi movie star Akshay Kumar as its brand

ambassador. There will be a new tagline Boring is out with advertising designed by
ad agency Lowe.
And to the charge that Micromax is a maker of cheap phones, Jain replies, We are not
even present in the sub-$30 phone market, as our cheapest phone is Rs.1,400. That
segment is dominated by Nokia with a market share of close to 80 percent.
But better responses can be found inside the buzzing Micromax office in Gurgaon. A 35person research and development team churns out designs and prototype of new mobile
phones some radically different, some only slightly so.
Theres a sleek and shiny white square studded with Swarovski crystals which slides open
to reveal a QWERTY keypad. Another sports a small clip on the bottom which is really a
wireless Bluetooth earpiece which can be unplugged and used. A third bills itself as a
remote control for your TV and DVD player, apart from its regular phone features.
But the most exciting of the prototypes is one called the secret weapon. Slated for a high
profile launch during the upcoming IPL cricket tournament, it could define the next big
category for the upstart company.

CONCLUSIONS

Mobile has become an important part of peoples life and it is no more

aluxury.

Sahibabad is highly competitive and price sensitive market as majority

of respondents want maximum services provided by company in low priced
handsets.

The majority of respondents who use mobile are quite young.

There is a good scope for new entrants in this circle as the service provided by the
existing players are not up to the mark and subscribers want to try out
new ones provided they stand up to the customers expectations.

Numbers of colour mobile users far out number B/W mobile users. And among the
colour mobile users majority of them are camera mobile users.

As the circle comprises of mainly high standard areas with few big shopping malls,
subscribers want that the network coverage should extend up to shopping malls and
addition to the small markets and roads.