Hhjj
The history of Micromax (2011-12 revenue: Rs 1,978 crore or Rs 19.78 billion), which ventured into the mobile phone market in 2008, is one of the most fascinating success stories in the Indian consumer electronics industry.
In barely five years, the company has come to occupy the third position (by volume) in the mobile handset market in India and is at No. 12 globally.
It leads the Indian tablet market with a share of 18.4 per cent, ahead of veterans Samsung and Apple.
The Gurgaon-headquartered company owes its success not just to the ticket it puts on its products or the speed with which it puts new designs on the shelves but to how it has managed these two crucial product inputs by leveraging China.
To be more specific, the labour cost advantage and the production flexibility that China offered.
Big deal, you may say, given that almost every other handset brand in the world manufactures its products in China.
Right from the Apples to the Samsungs to many of our home-grown brands like Karbonn, a whole host of players reaped China's arbitrage advantage.
But here is the stumper: the strategy that offered Micromax its biggest advantage in its first five years is under threat and it will require a re-examination by the company - and a number of other multinationals with Chinese production - of their overall supply-chain strategies.
The reason is simple. At Shenzhen, where some of China's largest electronics manufacturers are located, the minimum wage is set for a 13.3 per cent hike from this year - a move that could have a ripple effect across the world's major technology companies.
According to some estimates, between 2005 and 2010, basic manufacturing wages in the country have soared roughly 70 per cent.
"Eventually, Indian companies sourcing products and components from China need to develop local infrastructure. The reports of underage labourers and inhumane work conditions at some Chinese factories can have a cascading effect on the reputation of
In barely five years, the company has come to occupy the third position (by volume) in the mobile handset market in India and is at No. 12 globally.
It leads the Indian tablet market with a share of 18.4 per cent, ahead of veterans Samsung and Apple.
The Gurgaon-headquartered company owes its success not just to the ticket it puts on its products or the speed with which it puts new designs on the shelves but to how it has managed these two crucial product inputs by leveraging China.
To be more specific, the labour cost advantage and the production flexibility that China offered.
Big deal, you may say, given that almost every other handset brand in the world manufactures its products in China.
Right from the Apples to the Samsungs to many of our home-grown brands like Karbonn, a whole host of players reaped China's arbitrage advantage.
But here is the stumper: the strategy that offered Micromax its biggest advantage in its first five years is under threat and it will require a re-examination by the company - and a number of other multinationals with Chinese production - of their overall supply-chain strategies.
The reason is simple. At Shenzhen, where some of China's largest electronics manufacturers are located, the minimum wage is set for a 13.3 per cent hike from this year - a move that could have a ripple effect across the world's major technology companies.
According to some estimates, between 2005 and 2010, basic manufacturing wages in the country have soared roughly 70 per cent.
"Eventually, Indian companies sourcing products and components from China need to develop local infrastructure. The reports of underage labourers and inhumane work conditions at some Chinese factories can have a cascading effect on the reputation of