NEW DELHI: Micromax launched air-conditioners on Thursday, three years after it first branched out beyond mobile phones and tablets to sell LED television sets in 2014, to become a larger consumer durable company.
With air-conditioners, its competition with Korean majors Samsung and LG will increase, and will grow further. “We would like to launch all product categories in durables in the next two years,” said Rajesh Agarwal, cofounder of Micromax.
The company claims it sells a million LEDs a year in India, which sold 12 million units in 2015-16. Samsung sold close to three million.
Agarwal’s ambition is ACs is a modest 5% marketshare by next year. Next in line is washing machines, then refrigerators, but Agarwal doesn’t confirm. “These are natural extensions,” was all he would say.
Micromax is a price warrior. Its ACs will cost Rs 20,000-30,000, which the company claims would be much cheaper than rival products with similar features.
But, consumer durables are a different game. Chinese firms have not been able to beat the Koreans in India using a lower price strategy. Samsung and LG are also cover small towns and rural pockets. They are also much bigger companies. Samsung’s non-mobile revenue was Rs 18,200 crore in 2014-15. LG, too, estimates its revenue for 2015 to be Rs 23,500 crore. Micromax’s non-mobile revenue is in the 10-15% range of its overall revenue of about Rs 12,000 in 2014-15.
Agarwal said that Rs 1,000 crore is being invested across five factories. On a separate expense sheet, Rs 200 crore is year-marked for ACs, including manufacturing and marketing cost. From a current capacity of 50,000 units, the number will quadruple next year for ACs.