India’s largest competitor in terms of economic growth, China, has it taking over the smartphone market. The Chinese smartphone makers started gaining momentum with the likes of Xiaomi, Gionee, OnePlus, Lenovo and Oppo.
Over the last five year, the growth of smartphones in India has also been fueled by the increase in Chinese manufacturers selling their smartphones in the country at competitive prices. These smartphones are often loaded with top-notch specs and are priced very reasonably.
Global research firm International Data Corporation (IDC) survey has come out with a report saying that Chinese smartphone makers captured about 40 percent share in India in 2016. The number of shipments to India from China have been increasing, ever since Lenovo took the second spot after Samsung.
Micromax has been reported a continuous drop in shipments, and is unable to make an impact in its home country. At one point of time, it was the second one behind Samsung. So while Samsung has maintained its position, our Indian vendor has dropped its ranking.
Behind Lenovo comes Xiaomi, that captured almost 11% in 2016. There is a reason behind growth of Chinese manufacturers – they take their business a lot more seriously than Indian companies. How often do you see an Indian company talking about an ecosystem, instead of a standalone smartphone?
“Lenovo has retained its duo-brand strategy in India. Motorola is focused on the high-end market, taking up a third of its sales, whereas Lenovo phones targeting lower end account for two-thirds,” said Rahul Agarwal, Managing Director – Lenovo.
According to Upasana Joshi , Senior Market Analyst, IDC India, “It was almost like a “Chinese Smartphone Diwali” across all city tiers. China-based players contributed significantly to the growth at the offline retail counters, while continuing to dominate the Online channel. These vendors collectively accounted for more than 40 percent market share in the top 30 cities during Diwali month, primarily driven by 4G enabled handsets. Oppo & Vivo continue to shake the traditional line up of Indian vendors with their superior build quality, massive marketing investments in the offline channel.”
How did Chinese smartphone makers end up dominating the Indian market?
Chinese phone makers have been in India for quite some time now, and they have proved their mettle here. It goes without saying that there are way too many Chinese companies right now than there are Indian smartphone makers, but the quality of Chinese phones has improved drastically.
The reason being that Chinese companies think about their products on a global scale. Indian customers want to purchase smartphones that are acclaimed globally, and this increases the brand value of companies like Moto, Lenovo, Xiaomi and OnePlus.
Also, Indian customers are extremely price sensitive, and even a Rs. 1,000 difference in the cost of a phone can completely change the ultimate choice. Micromax, Yu Televentures, Karbonn and Lava has not been able to provide an ecosystem to their users, and have not invested much in their R&D clearly.
When it comes to smartphones priced between Rs. 10,000 and Rs. 20,000, Chinese smartphone manufacturers take the largest bite, because this is where an average Indian is looking for a smartphone in and usually gets the best deal in a Chinese smartphone.
Most of these companies are also looking to manufacture their phones in India, which might obliterate Micromax in a few years time if the company does not revamp its market strategy in India. Overall, it is a major threat to Indian manufacturers, but the competition provides more options to an Indian customer.