At Micromax, market share slides, rumours swirl

The country’s second-biggest mobile handset vendor — Micromax Informatics — may have recently featured on the list of top handset companies in the world, but it has been facing challenges on many fronts of late. While its sales growth has slowed, speculations are rife that the differences between its promoters and top officials may lead to more resignations.

While sources in the industry say ex-chairman Sanjay Kapoor exited due to differences of opinion on issues like global expansion to bring in new investors, a shift of focus towards online mode of distribution had been a bone of contention between promoters and top officials.

The company, when contacted, however, declined to comment further, except whishing Kapoor for his future endeavors. “He wanted to pursue something new in life and we are fine with that. The reports claiming differences of opinion existed between the promoters and Sanjay are completely speculative. No such differences of opinion had ever existed between us,” Rajesh Aggarwal, co-founder, Micromax said.

The company has been losing market share to rivals like Karbonn, Lava and Intex, which is the third-largest handset vendor in India, for the past few quarters. Analysts say its shipment growth rate is lower than the rivals it is chasing for two to three quarters now. According to CyberMedia Research (CMR) reports, in the fourth quarter of CY2014, while Micromax used to hold some 18 per cent market share in smartphones in the second quarter of CY2015 its share fell to

14.8 per cent. Intex’s share, during the period, went up to 10.4 per cent from 7.9 per cent. Samsung, the market leader, however, gained share in the domestic market — from

23.7 per cent in the fourth quarter of CY2014 to 24.6 per cent in the second quarter of CY2015.

However, Shubhajit Sen, chief marketing officer, Micromax, said, “Our share in the smartphones segment, which is strategically important now, has gone up in the April-June quarter. And our market share gap with the market leader is smaller than with that of the number three and four player.”

“Micromax, known for its innovation and responsiveness to market changes, has been lagging for the past few quarters,” Faisal Khwoosa, general manager of telecoms and semitronics at CMR, said. “Of late, its aggression has subdued and its approach has changed to a ‘me too’ from the leader.”

Declining to accept its loss of focus, Sen said, “Apart from newly introduced products in the smartphone segment, our entry-level phone like the Bolt S300 and D320 have performed very well. We have identified specific consumer needs, which form the basis of our innovation, and we are delivering through our new handsets.”

Micromax’s strong presence in bricks-and-mortar outlets had been a major driver for growth, Aggarwal, told Business Standard last month. Analysts point out that its presence in the e-commerce platform did not pay rich dividends.

While it launched its series of smartphones under the online-only brand YU, the sales are yet to reach close to its rivals. According to CMR data, during the first half of 2015, YU held a market share of some 10 per cent compared with Lenovo (including Motorola), which lead the segment at 45 per cent, and Xiaomi with 28 per cent.