March 02, 2017

Micromax plans Rs 600 crore consumer durables push

The Economic Times

NEW DELHI: Home-grown mobile phone maker Micromax Informatics plans to invest up to Rs 600 crore over the next three years to transform itself into a consumer electronics company.

The Gurgaon-based company expects consumer durables to make up about a fourth of its total revenue over this period, as it seeks to enter new categories like washing machines and introduces new models for the existing range of air conditioners and televisions. The mobile phone maker, which has dropped off the top five ranking charts over 2016, diversified into consumer durables in 2013.

It now plans to take a place among the leading air conditioner companies, even when the space is as competitive as smartphones, though offers far better margins.

"Our strategy of connected devices under the broader view of being a consumer electronics company will take a step up with new air conditioner models and then with washing machines," said Rohan Agarwal, vice president of consumer electronics business at Micromax. "We will invest abut '200 crore every year to build the channel and service," he added.

The company has introduced the Micromax Home Assist application that will allow its AC and TV consumers gafter sales service from over 400 centres. The company aims to get 60-65% of its business from mobile phones by 2020, 25% from consumer durables and 10-15% from international markets such as Russia, where Micromax plans to launch its LED televisions.

The company is among the top three smartphone players in Russia. Within the same time frame, it plans to introduce five to six models of semi-automatic washing machines. It will also employ about 500 people in the durable segment.

Agarwal said the company wants to replicate its success in the LED TVs segment - where it has a 12% market share - and achieve a 10-15% share over the next three years in the AC segment as well. Having launched four models in June 2016, the company plans to add four more this year between the price range of Rs 20,000 and Rs 37,000.

The total range will have only one window AC and the rest will be split models, which will be sold primarily in 10 states including Punjab, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Delhi and Rajasthan. Voltas and LG lead the AC segment by volumes and value, respectively. Micromax has set up 4,000 sales points, which it aims to increase to 10,000-12,000 in two years. The products will be made available through leading ecommerce websites in the months to come.