March 24, 2017

Micromax aims to expand overall VoLTE handset category with Bharat Series: Shubhajit Sen, CMO

Micromax said that it is aiming to expand the overall Voice of LTE (VoLTE) handset category with the launch of its Bharat Series. In a conversation with ET’s Tina Gurnaney, Micromax Chief Marketing Officer Shubhajit Sen said that the new series will help make phones more accessible to Indian users. He added that the series will help Micromax enhance the company its overall market share and better compete with Chinese and domestic handset makers. Edited excerpts:

Tell us about Micromax’s upcoming Bharat Series

Bharat Series' whole point of view is how we make phones more accessible to Indian users. Under the Bharat series, there are going to be two phones; Bharat 2 which is going to be first Google approved phone below Rs 3000, it's a 4G VoLTE smartphone. The other one is Bharat 1 which is going to be our first 4G VoLTE feature phone and it's going to be priced at Rs 1999. Bharat 2 goes (launches) first in about two weeks' time and maybe in another week or two after that, the feature phone will be launched.

What's the strategy behind launching these two phones? Is the strategy made to increase the overall market share or to tap the larger audience?

If you look at data from 2016, it was the first year where we found that the whole smartphone category did not grow that much and it was driven by the fact that the people were not upgrading from feature to smart. Two reasons for this are that high cost continues to be an issue and everyone wanted a 4G phone but a good quality 4G phone, that's the problem that we're trying to solve here which is with our smartphones.

The other trend that we're seeing is that because of some of the operators giving free voice calls over 4G VoLTE, we're seeing a lot of our feature phone users asking for such phones, we call it a hybrid feature phone which we think is a segment that's going to grow.

We do believe that we're going to expand the overall category because a lot more people are going to come into the category and obviously because we're very strong in that segment, our market share will grow.

Micromax has appeal in the Tier 2 and Tier 3 cities, do you think that this feature phone(Bharat 1) would impact the overall smartphone adoption or the feature phone to smartphone transition?

We find that there's still an opportunity even in urban centers, it's not that it's totally saturated but obviously the incremental volume growth will come from smaller towns. More than the tier 2-tier 3 towns, I think even rural areas and hub towns which distribute with these rural areas, those are the primary targets. We think this is going to be very disruptive. In another few weeks as we come closer to the launch, you'll see that we'll be layering on one more strong use case. All that we're saying is that this is going to totally disrupt the entry-level smartphone segment.

Are there going to be more devices in this series?

Right now we're focusing on this, our hope is to sell about 5-6 million devices over the next 5-6 months. We expect that over that period of time technology will move on, either the cost will drop or you can add more features. So maybe in 5-6 months or maybe in a year, we will upgrade the technology and maybe it's time for the next Bharat.

Are you also working with telecom operators for this device?

We're in conversations right now, so just ahead of the launch we should also be in a position to have a conversation about this.

Would these be open-market devices or bundled/co-branded devices?

No, they won't be co-branded devices, they’ll be open but we're looking for some very interesting technological solution which would be of high interest to some of our operators. Perhaps today it's a bit too premature because it's not totally locked down and conversations are on but maybe in a couple of weeks.

What sort of marketing plans do you have?

At this point of time, we believe that the focus is a lot on just getting the distribution and last mile marketing as opposed to doing a lot of TV ads because Micromax as a brand is very well known, the retailers have a lot of trust in us. We think we've got a disruptive product, so the primary focus is how we make this product available to all our retailers as quickly as possible.

Will the devices be made in India?


What's the update on manufacturing, how many devices are you currently making in India?

I think it's about 70-75%. We had gone ahead and said that we'd love to exit 2017 with 100% local production. We are on track to get to that.

What is the market share you're aiming at with these devices?

You will see us launch a multiple set of products, we're very confident that by the end of April-June quarter, we will continue to be one of the leading brands.

Are you also working with app developers for your feature phone device?

Not as intensively as we're working with app developers for our smartphones.

Will some of the basic services be embedded?

Sure. As an example, the truth is 20 million folks access Facebook through feature phones, so there are multiple use cases but right now we're focusing a lot on things like payments as an area we can add value to.

Will the device come integrated with such solutions?

We're hoping if not at launch, very rapidly we'll figure out where to get this.

Is the feature phone based on a form of Android-OS?

It's not going to be Android. It's most likely going to be Java-based OS.

What Micromax seeks to achieve from the launch of this series?

Our bigger play is to be in sync with the whole Digital India initiative that the government is taking and to get more people locked into the internet and the digital world. We believe that giving them good quality smartphones is the first step. 2016 was one of the first years where smartphone growth slowed down and that was because people were not shifting to smartphones from feature phones. We think price is one of the biggest reasons for this and by bringing down the cost of this product and still giving top-end functionalities like a great camera, great battery and 4G VoLTE, we think we can get another set of 10-20 million people to go from feature phones to smartphones ultimately.

What is the larger goal of Micromax when it comes to the Indian handset industry? Where do we see Micromax reaching in the next 1-2 years?

Our long term vision is to be the fastest growing mobile brand in the country and to continue to remain one of the leading players. We will play this across three or four different segments of the market. Our co-strength has always been the entry-level smartphones and products like this.

We will continue to also play in the belly of the market and you'll see a lot of new portfolios coming. That's going to be a big play with a completely refreshed portfolio in 2017. But the single biggest new incremental growth is going to be in the mid-premium segments. In 2016, with the advent of 4G and lots of new players coming in, we found the $200-$350 segment expand quite dramatically and that's not a place where we've had portfolio, we've developed that portfolio in over the next 2-3 weeks, you'll see some really new exciting launches coming.

We want to be a big player across each of the big segments in the marketplace and we're pretty sure that by the end of Q1 2017, you'll see us back at our no.1 or no.2 position that we've traditionally held in the marketplace.