Building Brand Architecture – Xiaomi & Micromax

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Introduction
This report builds and examines the brand architecture of two brands – Micromax and Xiaomi – Both major
players in India in the smartphones market. These two brands are chosen because not only are they in the same
market but they are also targeting the same segment i.e. the youth who want both affordability and maximum
number of features in their smartphones. Few years back these two brands were at loggerheads and started a
price war in the Indian smartphones market, however, now Xiaomi has taken a significant lead. This report will
bring out the stark differences in the brand architectures of these two brands. The goal is to observe how
consumers can have vastly different perceptions of and relationships with very similar products owing to the
differences in brand architectures. In an extremely price sensitive market like India how the consumers perceive
you can make or break your future irrespective of the value that the product provides.

Brand Architecture

 Brand Architecture for Xiaomi

Brand Core/Essence – Vitality

Brand Personality – Energetic, Learner, Connector, Quality

Emotional Benefits – Mi listens to me and builds on my

experiences on a weekly basis to make life more enjoyable

Product Benefits – Connects my devices to my daily

habits and needs

Product Attributes – Integrated phone and

products for the Internet of things through MIUI

Xioami has certainly become a major player in the Indian smartphones market in the recent years. Most of its
success has to be attributed to the proving high end features at very affordable prices and yet avoiding the
‘cheap’ tag from the consumers.
  Brand Architecture for Micromax

Brand Core/Essence – Affordable Innovation

Brand Personality – Cheap, Smart, Youth centric

Emotional Benefits - Freedom, Strong, Indian

manufactured so national pride

Product Benefits - High performance, value for

money, Multiple options to choose from

Product Attributes – Low pricing, Quick launch of new

version, Multiple options

Unlike Xiaomi, Micromax is a home grown brand that has clearly positioned itself for the masses. It is
definitely considered a cheap brand and has gained a lot of traction amongst the rural youth.

Brand comparison
As we can see both brands compete in very similar markets. Also both brands put huge emphasis
on affordability. While Micromax prides itself at being really cheap and Indian, Xiaomi connects
with the youth because it creates a sense of pride and exclusivity even for an affordable product. It
does this through its online flash sales where its products repeatedly go out of stock. Due to these
aspects, and their products having a more premium design the consumers have been willing to pay
a little premium even in a price sensitive market like India. Hence you will find Xiaomi products
usually priced a bit higher than Micromax products.

Another difference is that Micromax believes in providing a huge number of options to its
consumers in an effort to fit into the customized needs of the consumers. This has a huge impact
on their profitability as it puts pressure on their distribution channel. Xiaomi has a small number of
options 3-4, much like Apple they try the one product fits all strategy. This has worked for Xiaomi
as although more options look better but they create confusion in the minds of the consumer. With
few products Xiaomi is able to better present their value proposition to the consumers.

While Micromax has gained traction because of its consistent projection of a cheap and affordable
feature rich phone, they have been able to connect with the rural youth. Xiaomi with their better
design and focus on giving an affordable premium experience have been able to connect more with
the urban youth.
 Brand Value

Xiaomi is currently one of the top 50 global brands and it is majorly only present in the two most
populated countries in the world i.e. India and China. According to Brand Finance 2014 report Xiaomi
brand was valued at $3.798 billion. It is expected to grow exponentially as it grows in its current
markets and ventures into more mature western markets. The important thing to note here is that
Xiaomi are using a strategy that is a combination of both emulating the best in the industry and
innovating on its own. It is also currently trying to create an ecosystem of products to make life
smarter. All this combined with the positive image of affordability with innovation and quality will take
this brand to great heights.

When we look at Micromax, once a force to be reckoned with, its growth has slowed down as it has
faced stiff competition from new Chinese players like Xiaomi. One thing that it regrets is its brand
perception of being cheap and low on quality which has greatly affected its sales. This has highlighted
the need to pay more attention to the brand architecture. In 2014 Brand Finance valued the Micromax
brand at $398 million.

However, one thing to note here is that apart from smartphones both these companies are in other
tech product markets as well such as tablets, laptops, air purifiers, TVs etc. Hence it would make
more sense to compare the brand value in the specific product category by looking at the % revenue
share of a particular product say smartphones. Another aspect is restricting this revenue to a
geographical location where both companies are present like India.

Sources Consulted

1. The Brand Finance India 100 - India’s Most Valuable Brands, 2014
2. The Brand Finance Global 100 Most Valuable Tech Brands, 2014
3. http://www.mi.com/en/store/
4. http://www.micromaxinfo.com/
5. https://www.scribd.com/doc/131823696/a-study-on-consumers-perception-towards-micromax-
mobiles
6. http://www.labbrand.com/knowledge/labreport/brand-positioning-strategies-rising-chinese-
smartphone-brands