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Retailing Essay

1246 words - 5 pages

It leads the tablet market in India ahead of global giants like Samsung and Apple (according to CyberMedia Research figures released on Monday) and is the third largest mobile player in terms of volumes.

Micromax, which entered the mobile space just four years ago in 2008, is doing all this, and more: the company on Tuesday forayed into the home entertainment space with LED televisions and home theatre systems.

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Apart from being the third largest player with 8 per cent share behind Nokia and Samsung, it is also the 12th largest manufacturer. The Global Handset Vendor Marketshare report from Strategy Analytics stated in the second quarter of 2011 (the latest figures available), Micromax topped the micro vendor rankings, shipping four million handsets worldwide.

The numbers are impressive for a late entrant. In four years, Micromax has managed to log in sales of close to 1.5 million handsets per month.

So what is the key to Micromax’ success? Experts attribute it to low pricing, unique features, focus on entry level products and a huge distribution set-up. In the tablet space, its products start at Rs 6,000 and go up to Rs 9,999. The same is evident in its LED TV launch. An entry level LED TV of 24” from Micromax costs Rs 15,990 and a full HD smart TV of 55” costs Rs 129,990.

But Sharma downplays the price warrior adjective. “Pricing was never our driving force. When we launched our first mobile handset, it came with a battery that lasted for 30-days. In the tablet space, we focused on the education and the entertainment segment. Going ahead you will see more products in tablet. The volumes in this space are only expected to go up,” Sharma says.

Micromax’ strategy with the tablet revolves around education and entertainment (edutainment). The Funbook has tie-up for education related digital content from Pearson, Everonn and Vriti. For entertainment, it comes preloaded with Bigflix (free movie for a month), Hungama, Indiagames and Zenga. Micromax introduced its product only in April this year and with five products, it has sales of 65,000-70,000 per month.

A significant aspect of Micromax’s success is its distribution network. This is something that the founders inherited right at the time of inception. Micromax was founded in 1991 by Rajesh Aggarwal who was a distributor for computer hardware of brands such as HP, Dell and Sony. For each category of products, the distribution channel varies.

For feature phones and tablets, the company has a three-tier distribution set-up, and for smartphones and LED TVs, it’s a two tier model. The three tier set-up includes 80 large partners, 2,500 small partners, followed by a network of 125,000 small retail outlets spread across the nation.

Telecom industry experts also believe that the company has managed to understand the Indian consumer psyche much better than the multinationals. “Entry level tablet is the real battle ground in India. There is a huge amount of activity in the tablet space, especially since the government initiated Aakash tablets. The users are aware that these are not some fancy gadgets but entry level offering. That is where Micromax has gained...

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