India smartphone maker eyes China takeover

Article By :

India's home-grown mobile phone giant Micromax is fast keeping up to pace with its toughest rival - China, but to realise its ambition to be in the top five global handset maker by 2020, it has to penetrate the rival's market.

India's smartphone market is keeping up to pace with its larger neighbour.

Micromax Informatics, India's top home-grown mobile phone giant has managed to deter its rivals from China, consequently paving the way for them to emerge as the world's most important smartphone market. However, if the Indian mobile phone giant wants to see its goal to be in the global handset maker top five by 2020, it also has to penetrate the Chinese market.

Reuters Breakingviews, in a conversation with Micromax co-founder Vikas Jain at the recently concluded RISE conference in Hong Kong revealed that it's exactly what they intend to do.

According to the American market research firm IDC, India's smartphone shipments grew by 135% in the last two years until December, five times the rate of growth in China.

While Samsung is still taking the lead in India, Micromax comes close second, churning out over 30 new handset models a year, apart from manufacturing tablets and televisions.

Micromax has seen success overseas- selling handsets in Eastern Europe and in South Asian countries like Bangladesh and Nepal. The Indian manufacturer has also become a top three player in Russia and in the process, has helped significantly increase the demand for cost-efficient phones in the wake of the country's economic crises. Yet, any manufacturer that has its eyes set on penetrating the global top five must be present in China, which accounts for 31% of global volumes.

Apple and Samsung continue to dominate the top end of the market and it remains unclear as to what advantage Micromax has over its rivals – local or otherwise.

Reuters reported that Alibaba was set on closing a Rs.7,988.28 crore (USD 1.2 billion) deal in venture capital for Micromax for a 20% stake in 2015 but the deal fell through. Micromax chairman stepped down from his position shortly afterwards.

The Indian company said raising funds is the easiest way to penetrate the Chinese market, and it can come through a strategic partneror a local stock market listing.