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Indian Smartphone Brand Micromax to Sell Phones in China, raise money

The largest Indian smartphone manufacturer, Micromax had plans for global expansion from the last couple of years. In early 2014, the company had entered the Russian market, and now it is in the top five list with a market share of 5%. The company is facing tough competition in India from homegrown brands and the Chinese brands which are offering devices with better specifications at very affordable price. Recently the company came up with a new strategy and revamped its logo for a new identity.

It also announced 16 new smartphones and an exclusive online store for selling their own devices. Micromax also sells its handsets in the neighboring countries like Srilanka, Nepal, and Bangladesh where it is in top three position in all the three markets. Now the company announced to enter the world’s largest smartphone market, China sometime in 2017. Though China has been the bigger market, its smartphone penetration had slowed down in the recent times.

Even the Chinese brands are looking for global expansion to stay ahead of their competition. Interestingly, Micromax smartphones are manufactured by Chinese OEM’s, and few smartphones are just rebranded. In India, Micromax is rapidly losing the substantial market share in the affordable segment to the Chinese manufacturer which have a seen a rise from 9% to 18% market share in a year. Even when the Indian smartphone market is grown by 15.4% in Q4 2015, Micromax has seen a drastic drop from 15.4 to 12.1% at the same time.

There are also rumors that Alibaba has moved away from purchasing 20% stake worthing $1.2 billion, because of the lack of a proper roadmap for the future. The company is expecting the revenues from international operation to grow by 50-80% in 2017. By the end of 2020, the company is aiming to be the fifth largest global manufacturer which is currently occupied by Vivo. In Q1 2016, even Xiaomi and Lenovo have missed the place in the top 5 lists where they are replaced with other Chinese brands OPPO and Vivo.

However in China, Samsung and Apple are struggling with the stiff competition from Chinese brands. While the world’s top two manufacturers Samsung and Apple are struggling, Micromax’s path in China will not be as smooth as in other foreign countries. It will be interesting to see what Micromax does to compete against the Chinese manufacturers on their home turf.

By Teja Chedalla on Friday 3rd of Jun 2016


SOURCE wsj.com
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