Chinese Smartphone Makers Outperform Indian Counterparts

The Chinese influence has been rising not just in the South China Sea but also in the Indian smartphone market. As per the recent data released by the International Data Corporation, India consumed 27 million Chinese smartphones in the first fiscal quarter of 2017 registering a growth of 14.8 per cent over the corresponding period last year.

This influx in the Indian market poses a threat to Indian smartphone manufacturers. Four Chinese players Xiaomi, Lenovo, Oppo and Vivo have conquered the Indian smartphone market, disrupting the market of their Indian counterparts.

Akshay Dhoot, head of technology and innovation, Videocon told BW Businessworld, "The Chinese players are embarking on an aggressive marketing strategy. Comparison between Indian and Chinese 'components' development industries reminds me of the ant and elephant analogy as Chinese industries are more experienced in component and semiconductors. Innovation in hardware is time-taking but India can upturn things if we work on our software development, utilizing India’s strong IT infrastructure and capabilities. Make in India has already accelerated the development of production capabilities in India."

India, the second largest smartphone market in the world witnessed a drop of 20 percent in the market share of its homegrown brands. For instance, in the first quarter of 2015, Micromax was the second-largest smartphone maker with a 16.22 percent market share, but by the first quarter of 2017, its share plummeted dramatically to 2.74 per cent. Xiaomi with its latest launched model Redmi Note 4 and Redmi 4A, grabbed the lion share of the market pegging a sequential growth of 39.8 per cent.

However, the shrunk in the market share of Indian smartphone makers is not only because of the stiff competition which they are facing from their Chinese counterparts but also because of two prime internal reasons. Firstly, the shift to 4G (thanks to Reliance Jio) took Indian makers by surprise as over 70 per cent of Indian smartphones were 3G. Secondly, demonetization also slowed down their pace of sale and production simultaneously.

"With the shift to 4G, Indian smartphone market witnessed a vacuum within the sensitive price segment of below Rs 10,000 smartphones. This is where the Chinese took the lead," adds Dhoot.

Prakash Rai, manager at a Micromax retail store in Delhi told BW Businessworld, “Yes, we have been witnessing a dip in sales, but I guess this is temporary. People will revert back to us. Lack of 4G handsets below Rs 10,000 range was the major reason towards the shift of consumers. However, I would stress it again that we will soon make a comeback leaving behind all Chinese brands.”

The comeback for the Indian smartphone makers isn’t going to be easy as the Chinese rivals look far more firm, tenacious and seem to have a more profound sense of the Indian market.