Indian smartphone giant Micromax set for international expansion

Micromax, the second largest smartphone vendor in India, has announced plans to expand to China and possibly fund its international expansion via an IPO, according to the WSJ.

While Micromax currently accounts for 16% of the rapidly growing Indian smartphone market, according to Counterpoint Research, it’s currently losing share to domestic competitors like Intex and Lava, as well as Chinese entrants Lenovo and Xiaomi. Micromax seems to have decided to adopt a similar strategy to those Chinese competitors and chase growth internationally.

Telecoms.com spoke to India-based smartphone analyst Neil Shah to get more perspective on why Micromax is making this move. “It is imperative for Micromax to find new growth markets,” said Shah. “China will be a tough market though competing with likes of Oppo, Vivo and Huawei which have own R&D, manufacturing whereas Micromax has yet to have full scale tier-1 brand level R&D setup to move up into Top 5. If you see all of the top 5 brands globally invest in their own R&D and IP which Micromax lacks.

“In order to do that, Micromax needs cash infusion, so going IPO will be key to scale and have enough capital to invest in global scale R&D. Next would be manufacturing, which they have already started locally but should be more than assembly to tightly control the process, quality of phones from scratch at PCB level, reduce dependence on ODM.”

China does seem like a strange choice given how saturated it seems to be by countless domestic players as well as Samsung and Apple. More fertile ground might be found in other APAC markets like Indonesia, Pakistan or Southeast Asia and maybe they are on the roadmap. But India itself is expected to remain a major global smartphone growth driver for some time, so Micromax might want to focus on getting its own house in order first.