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Rahul Sharma: Appealing to the Indian Market

Rahul Sharma, co-founder of Micromax, added a local flavour to the country's mobile phone market and became India's largest maker of mobile phones. The firm is now valued at $1 billion and is headed for an IPO

Published: Dec 28, 2010 06:33:36 AM IST
Updated: Oct 15, 2014 04:38:15 PM IST
Rahul Sharma: Appealing to the Indian Market
Image: Amit Verma
Rahul Sharma, co-founder of Micromax

My Mentor: P.L. Sharma (father)
How he has helped me hone my leadership skills: He instilled in me a strong sense of work culture, honesty and sincerity. He always tells me to keep on doing good things without worrying about the results.
His advice that has stayed with me: Treat everyone as a human being, whatever be their social or economic standing. If you say the right things in the right way, even if they are critical, people will be with you.

Micromax exists today because it created the McAloo Tikki burger of mobile phones. Well, sort of.

The potato cutlet burger was a runaway hit with Indians. The reason, says Rahul Sharma, 35, co-founder of Micromax, the largest Indian maker of mobile phones, is because McDonald’s understood the “local flavour”. But when it came to phones, multinationals like Nokia and Samsung were busy flogging products created for a global market.

“It’s almost quite stupid when you think about it now,” says Alok Shende, founder of telecom consulting firm Ascentius. “Nearly 100 million newer mobile subscribers with daily income levels of Rs. 300 - Rs. 500 were entering the market every year. And their primary barrier was the cost of the phone.”

Sharma, the brains behind Micromax’s product strategy, decided to go local. His Rs. 2,000 phones with 30 days of advertised standby battery life became the first McAloo Tikki burger-offering of Indian mobile phones.

Since the first phone in 2008, Sharma has churned out blockbuster models with uncanny precision. All of them carry two differentiators: An affordable price and a set of features targeted at a particular segment.

It is a strategy that has paid off. Micromax today is valued at over $1 billion, has private equity funds chasing it, and is headed for an IPO.

The other team members are Sharma’s childhood friends: Rajesh Agarwal, Vikas Jain and Sumeet Arora — all equal partners in the firm. Each of them look after specific areas. But “Rahul is kind of like the opening batsman in the Micromax team,” says Naveen Wadhera, director, TA Associates, a private equity firm, the earliest investor in Micromax.

“I’m asked always what will the company’s next hit be, and my answer is ‘Rahul has a roadmap’. He can anticipate what consumers will want in the future on a consistent basis, over and over again,” says Wadhera.

For instance, Sharma sensed the aspirations of small town India towards BlackBerry-like QWERTY phones. The result: Micromax’s QWERTY phones outsell BlackBerrys by “several tens of times”, says Wadhera. Similarly, Sharma’s bet to create a Swarovski crystal-studded phone, Bling, targeted at women was a massive success.

“We launched 40 models this year and want to be the Sachin Tendulkar of the handset market,” says Sharma. Larger companies like Nokia or Samsung cannot replicate this strategy as easily because their manufacturing and supply chains are optimised for economies of scale.

But newer products alone may not be a sustainable differentiator. Micromax also has to focus on distribution and branding, says Shende.

Wadhera says Sharma is best clued into the distribution network, and distributors love his ability to come out with new products, maintain open and direct dialogues with them and make on-time payments.  

Sharma says this year the company will spend close to Rs.100 crore on advertising and marketing to position Micromax as an aspirational brand. Unfortunately, it seems to treat advertising like the mobile market and has run through three ad slogans in less than two years.

The future is going to be much tougher too. For one, the entry of 3G services will cause many consumers to opt for faster and costlier 3G phones; an area where Micromax is not strong. Sharma will try to address that by bringing in smartphones based on the Android platform that start at Rs. 7,000. He also plans to launch Internet tablets. Then there’s competition. When Micromax landed on to the Indian mobile phone scene, many were taken by surprise. Now, its competitors have been studying its moves and have replicated it.

But Sharma is not perturbed. In fact, he is using his strength in India to expand in emerging markets like Latin America and Africa. “Many of our competitors were copying what we were doing this year,” he says. “But we are still three times bigger than our nearest rival. Catch us if you can!”

(Additional reporting by Prince Mathews Thomas)

(This story appears in the 31 December, 2010 issue of Forbes India. To visit our Archives, click here.)

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  • Tarun Tomer

    Worst service quality Micromax offers to its customers. Soon Micromax will be history if Management will not give attention to its after sales service.

    on Nov 7, 2014
  • Vikas Yagnik

    The Most Pathetic Mobile Made and SOLD by Mr Rahul Sharma and Company, I need its mail Id to let them know that whatever they are publishing is just FAKE, They might be No1 in terms of selling Mobile but also No1 in worst Services

    on Oct 6, 2014
  • Udit Verma

    So, he is the owner of the super cheap

    on Jul 10, 2014
  • Pallabi Roy

    Hi I am trying to get the e-mail id for Rahul Sharma the founder of micromax to complain about the kind of treatment that is given to the customers at the service center in Dwarka sec-5 who go there to get their phone repaired. I was the recent victim of such a treatment and would like to complain about the people manning that center along with dealer of micromax in dwarka sector 12. They have put goons in the service center who have to compassion, and are rude, misbehave and only harass customers. I need help. Regards Pallabi

    on May 11, 2014
    • Tarun

      Very true Pallavi. Please help me if you found mail ID of any one from top management.

      on Nov 7, 2014
  • Umesh Rohilla

    Service after sales of the product is very poor, if it is continue than no longer time to quite from market. it is past example if you are not care our costumer than costumer would avoid to you in the market. In my case I have purchased 3 mobile set of micro and completed one year all mobile set are not workable but no body listen the problem, hence I would be threw in dustbeen.

    on Jun 17, 2013