India has the second largest number of smartphone users in the world, thanks to China. The country itself stands at the top of the list, with more than 110 million shipments per quarter. India may not be where China is now, but there are plenty of familiar names from the country which dominate the Indian market with its Chinese smartphones.
Chinese smartphone makers continue to dominate the market and have edged out Indian phone companies from the top seller list. Chinese smartphones are leading the field today with a whopping 53 percent share of the smartphone market in the country.
Four out of the top five brands in the Indian smartphone market are from China.
- Xiaomi
- Samsung
- Vivo
- Oppo
- Lenovo
India may have seen a technology revolution in the last couple of years, but its been more like a Chinese Smartphone Revolution.
Chinese Smartphones & The Indian Market Cannibalization
Young smartphone companies from China are repeatedly pushing their devices in India, one of the few global markets that has untapped growth potential for smartphone sales. The recent figures are an evidence of the progress. Indian brands which once dominated the market saw their collective share shrink by more than half in the last two years, compared to the Chinese smartphones.
Despite the government’s continuous push to help the domestic smartphone manufacturers, China-based vendors are ruling the market with a collective market share which was a massive 53 percent in 2017, up from 34 percent a year ago.
The untapped demand in Tier II and Tier III cities remains the key area of attraction for the Chinese brands to explore the growth potential in India. Xiaomi took the lead over Samsung in the smartphone market recently, and Reliance Jio has played a major role in pulling down the data prices, giving a major push to smartphone sales in India (includes a significant part of Chinese smartphones).
The Weakness – No Solid Indian Smartphone Brand
With no solid smartphone brand in India, the Chinese players have exploited this weakness to expand their operations in the country. Recently, the customs duty on the import of mobile phone parts was increased to 20 percent from the existing 15 percent, to give a boost to local manufacturing and to provide the Indian brands with a chance to stand against the cut-throat competition from these Chinese smartphones.
The efforts seem useless, as leading Chinese smartphone manufacturers like Xiaomi, Oppo and Vivo have begun manufacturing or assembling nearly 100 percent of their products being sold in India. Most of these companies are now manufacturing Chinese smartphones in India and are locally are sourcing the mobile parts, so they are not affected by the changes in the policy.
The combined market share of the top four Indian brands – Micromax, Lava, Intex and Karbonn, was a mere 12.5 percent in 2017. Micromax had 5.4 percent share, followed by Lava with 2.6 percent, Intex at 2.5 percent and Karbonn at 2 percent, where Xiaomi alone had a 20.9 percent share in the Indian market for the entire year.
Chinese Smartphones – Local Manufacturing & Production
The local smartphone companies have repeatedly failed to match the strength of the Chinese vendors and its Chinese smartphones when it comes to offering better user-experience at affordable prices, massive distribution networks and the mass scale low-cost production.
While Chinese manufacturers are able to attract the new users across multiple price bands, the domestic manufacturers are largely restricted to the sub Rs. 5,000 price category. The local players at the same time are outspent by the Chinese brands when it comes to marketing, advertising and sponsorships.
Half a decade back, international smartphone brands like Sony, HTC, Microsoft (with Nokia) and Samsung ruled the Indian smartphone market. Local mobile manufacturers sensed the immense opportunity with the pricing, and concentrated on affordable handsets. The domestic brands quickly gained traction in the market and the makers enjoyed over 40-45 percent market share. But the tide turned as soon as the Chinese behemoths entered the scene, and Chinese smartphones are the new kings.
For the Indian brands to make a real comeback against the Chinese smartphones, the companies need to scale up the features while keeping the prices sensible to gain market share and has to target a multi-channel distribution approach to increase sales.
The government has already announced a phased manufacturing plan for the local companies to support the indigenous production of mobile phones by providing a tax relief, incentives on the components and accessories used for the devices!