In popular business lexicon, Micro­max Informatics, the Gurgaon-based, home-grown manufacturer of hand­sets, tablets, and now even LED TVs, is best known for its exciting role as a price disrupter in India’s mobile mar­ket. After all, much of Micromax’s product portfolio of more than 60 models today—ranging from the fea­ture rich, dual-SIM phones to QWERTY, touch-enabled smart phones—come at price tags that on an average is at least up to one-third the price of equivalent phones from global majors such as Nokia, Samsung and Apple. For example, Micromax’s Canvas 2, priced at Rs10,299 has 80 per cent of the features that the Sam­sung S3 boasts of, where the Samsung S3 costs signifi­cantly more at Rs33,000. 

Yet, this image of being “price slashers” or “produc­ers of the country’s cheapest phones” isn’t something Rahul Sharma, the company’s co-founder and execu­tive director fully endorses. Sharma, who leads the product and sales strategies at Micromax, carefully explains that their becoming a brand that sells about 1.75 million phones every month, wasn’t based on price-slashing. “In fact, our background is R&D based. Our oxygen, our USP is innovation. Our first phone, the X1i Marathon Battery, was unique because we launched it in the rural market in 2008 with a never-before 30-day battery standby time. That it was priced at Rs1,469 was the proverbial icing.” 

Yet, much of the phenomenal success of the com­pany (according to the Global Handset Vendor Market Share Report from strategy analytics, Micromax is the 12th largest hand­set manufacturer in the world) is undoubtedly a direct result of the way the company consistently stormed price bastions since the launch of the X1i. Think about it—would the same innovation of a 30-day battery back-up, or their consequent “many firsts” such as their Dual SIM capacity phone, or more recently, the upmarket Bling phone targeted at aspira­tional women in smaller urban centres (priced at an affordable Rs5,500) be such formidable successes if they didn’t come with that smart pricing? 

Sharma takes that argument further, and says that their positioning on pricing, and their success has been much more nuanced than people give them credit for. “Of course, we’ve generated huge word of mouth because of our prices. But, we never advertised on pricing. That’s not how we got consumers to come to us. Actually, our price is that last surprise that gets revealed to our customers. It’s like they get all the features they need and want, and get them at a price that they believed was unimaginable or unlikely. That’s affordability, that’s the real beauty.” 

Undoubtedly, their model validates the perfect spot they found to enhance this value proposition. The company understood that the price-prod­uct combination will work only in the right market. So, ditching conventional wisdom, they deployed their tech innovation and costing strategy in the rural market. In the first 12-18 months after they launched in 2008, Micromax confined itself to small towns and rural areas, and specialised in entry-level and mid-segment handsets priced between Rs1,800 and Rs2,400. They only expanded to the more competitive urban areas after gaining success in rural markets, and smartly aligning their distribution and supply chain network to go ahead. Today, the company has a distribution network of 55,000 retailers. Clearly, its urban foray and expanding its product repertoire has been successful. It also allowed them to consciously switch gears and rehaul their brand positioning. In April 2012, Micromax launched Funbook, its first tablet which was priced at Rs6,499—nearly one-fifth the price of other popular tablet devices such as an iPad2 or Samsung’s Galaxy Note. Today, in fact, India is the only market in the world where neither Sam­sung nor Apple is the market leader in tablets. Micromax occupies that coveted position.

Everything we do will always be value for money. That is our DNA. We can’t lose that charm, can’t ever leave that aspect of who we are.” - Rahul Sharma

Encouraged by the response to its higher end products—Funbook tablets and its Canvas series of Android smartphones—Micromax is now working to flavour its brand with the twin advantages of cost and “cool­ness”. Their recent promotional campaign, Sharma asserts, is evidence of the fact that their tonality is now much more aspirational and urban cool, and in line with the new products that is now their focus. “But, of course, everything we do will always be value for money. That is our DNA. We can’t lose that charm, can’t ever leave that aspect of who we are.”