Brands which can crack open the new 'feature-smartphone' segment will grow, says Micromax co-promoter Vikas Jain

Micromax (among other crop of homegrown brands) surprised big giants of mobile phones by coming out of  nowhere to grab a decent market share in the feature phone segment in India and is now the third largest selling mobile phone brand in the country behind Nokia and Samsung. The company also attracted a string of private equity investors and even as the firm had to push back its proposed IPO, it recently raised fresh funds from a Chinese fabless semiconductor maker. The company has also expanded into new segments like tablets and recently roped in a professional CEO to run the day to day affairs of the company. In an interview to techcircle, Vikas Jain, co-founder and director of Micromax, talks about the handset market, future plans and the journey of brand Micromax.

Local handset makers garnered a chunk of market share by rolling out value phones and fighting it out with global brands. But, how fast can brands like Micromax convert that momentum as you move up the value chain?

It's all about what is the cumulative experience we can give to the users. I think the cost of the device is going to be driven by the experience we can offer on the device. The market or the industry as such plays it out between a smartphone and a feature phone, but we also believe there is a new segment which is evolving which is like a feature-smartphone. So, it is like you are providing an experience akin to the smartphone, but at the pricing of a feature phone. The people or the brands that can really take advantage of the brand value and present that segment to the customer are the brands that will be able to grow.

We have had a hugely successful launch of our model Ninja, where we had built in the artificial intelligence application called Aisha. It was very well received by the consumers and now consumers have started looking forward to the smartphone rollout by Micromax. This is the euphoria which is very similar to the way we launched Qwerty handsets in India, where we repositioned Qwerty from a business phone to a chat phone. So, if we are able to do exactly a similar thing in smartphone category and bring it to the masses I think that is what India needs.

Building a brand is a constant drive. We really will not be able to build a brand cult overnight but what has grown tremendously for us is the acceptance from the consumer. We have been increasing our average sale price of the devices and the acceptance has increased. We have been there in the B2C segment only for last four years so it might take little more time for the consumer to have that confidence and we are not in any hurry for that.

Micromax recently raised $10 million from Spreadtrum of China. How have you deployed that money and by when would you require next round of funding? Could it be another round of PE funding or an IPO?

The money is majorly being used for R&D initiatives and initiatives on VAS and applications. As far as IPO or another funding goes, it's a pretty uncertain industry. As we talk, we don't intend either but then you never know.

Is the mobile handset market ripe for consolidation or there is still room for even smaller handset makers to grow as of now?

I would not say consolidation as such because many of these small players are actually not bringing value in to the ecosystem. It is more of an opportunist business and people or brands are moving out as soon as they start feeling the pressure. So, for a brand to succeed in the long term they really need to have a product roadmap, they really need to have a brand essence and they really need to drive the brand forward. I think for any company to exist or co-exist in this eco-system, these three attributes are going to very important.

How do you see Micromax five years from now as an independent handset company or an Indian brand of a foreign handset maker?

I would say, we would further like to evolve as a brand which is loved by most of the consumers. I am also not ruling out of the possibility of the brand doing things away from the mobile handset ecosystem only since we already launched our tablet.

We have already ventured into accessories. There is a new product division which is looking at accessories and we are finding the acceptance level to be encouraging as well.

How has the growth been for Micromax in terms of revenues? When do you think the company will hit billion dollar revenues?

The company had closed 2010-11 with around $500 million in sales with around Rs 200 crore net profit. Last year's numbers are yet to be audited. But I think what is imperative for me to say is we continue to ship a million handsets a month.

I think the next 3 years are going to be crucial from the perspective of hitting bigger milestones.

How about international expansion in other emerging markets?

We are already there in the emerging markets. We are in talks with various carriers also for partnerships. As we talk, our first set of target was SAARC, middle-east and Africa and Latin American operations. Now we are looking to move to North as well as Latin America.

(Edited by Prem Udayabhanu)