Micromax plans to sell phones in China, raise cash

To be among the world's top five smartphone manufacturers, India's Micromax is set to sell phones in the Chinese market, reported the Wall Street Journal. China, the world's largest market for phones, will help Micromax expand volume growth and push up India's number two manufacturer on to the world podium.

In a bid to achieve the ambition, the company may list its shares on the Indian bourses or invite a strategic partner in two years' time, said the report.

Speaking at the Rise Conference in Hong Kong on June 2, Micromax co-founder Vikas Jain said that cash was important to the firm as it needs to acquire companies that help build a network of services. That will help our "phones stand out in the crowd of competitors," WSJ quoted him as saying.

The Economic Times, citing sources, said Micromax plans to roll out a single model in China in collaboration with its e-commerce giants. To have an exclusive Chinese mobile phone portfolio, the company will partner with local players to the extent of offering a different operating system, it added.

According to the ET report, a statement by Micromax read that its vision to be one of the world's top player "will be realised by going to multiple countries, by being not only a hardware but a hardware and services company, and hence the experience."

WSJ, citing International Data Corp (IDC) research, said that Micromax's target was ambitious as the China-based Vivo, currently the world's fifth largest manufacturer, sold four million phones a month — nearly 3 million phones more than the number sold by Micromax in the same time period. Also, the company's sales in the Asian market have slipped, with Samsung and many Chinese manufacturers vying for a larger share.

WSJ quoted Kiranjeet Kaur, analyst at IDC, as warning that the Chinese market is not growing and is really competitive. "I don't know how they will survive there," the analyst said.

However, another IDC researcher, Navkendar Singh, told ET that the strategy of offence might be the best form of defence when wanting to venture China. In fact, their phone manufacturers have got the better side of this philosophy by continuing to do well in India despite soaring competition, he added.

Micromax, which sells phones in Nepal, and is the No.3 player in Russia, may not find China's gradual shift towards mid-tier priced phone market as its core strength. Micromax's core competency is in entry-level phones and feature phones, noted ET. However, china's smartphones buyers are now moving away from entry level phones and the smartphone makers are offering strong local services.

Source: Micromax plans to sell phones in China, raise cash