Micromax to launch fridge, washing machines to stabilize falling revenue
New Delhi: Mobile phone maker Micromax Informatics Ltd is expanding its consumer durables line-up in the hope of stabilizing its falling revenues amid stiff competition from Chinese handset makers.
Gurugram-based Micromax, which is now trying to position itself as a consumer electronics company, targets about 30% of its revenue from categories other than phones by fiscal 2018-19. For the current fiscal year, these categories are likely to account for 20% of overall revenue, said Micromax co-founder Rajesh Agarwal.
Micromax, which already sells air conditioners and televisions, is launching washing machines and refrigerators and expects the consumer electronics category to contribute Rs2,000 crore in revenue by 2020, Agarwal said.
For the fiscal year ending 31 March 2017, Micromax reported revenue of Rs5,614 crore, a nearly 40% drop from a year earlier, according to filings with the Registrar of Companies.
Agarwal hinted at a further decline in revenue for this year but did not disclose the exact numbers. The company expects to close 2017-18 with revenue of Rs1,100-1,200 crore for the consumer electronics segment, he added.
Micromax, backed by Sequoia Capital, TA Associates and Sandstone Capital, the largest Indian manufacturer of handsets, has struggled to keep pace with Chinese brands like Xiaomi, Vivo, Oppo and Gionee, which have flooded the Indian market with cheap yet reliable smartphones.
“We have a conviction that we can be a big consumer electronics company,” said Agarwal. The firm is targeting 5% market share of the refrigerator and washing machine segment in the first year and about 7% in the next 24 months, he added.
“India’s consumer electronics segment is growing at 11-13% and we want to address the mass market segment by launching affordable consumer durables,” Agarwal added.
Micromax’s refrigerators will range from Rs8,500 to Rs15,000 and washing machines will be available from Rs8,500 to Rs12,000.
The company is in talks with the Uttar Pradesh government to open two new facilities by the end of 2018, where it will manufacture the consumer electronics range. “For now we are getting these products made by other Indian manufacturers but will be moving the production in-house as soon as our new facilities are up and running,” Agarwal said.
The company has already invested Rs300 crore towards its manufacturing facilities in the last three years and it expects to invest another Rs200 crore in the next 24 months. Micromax has set aside a marketing budget of about Rs60 crore for building its consumer electronics segment.