Why Chinese Smartphones Are Killing The Indian Ones

by Moumita Deb Choudhury    Mar 02, 2017

smartphones

The Indians are currently witnessing a “Chinese smartphone revolution” in the country. Going by the latest figures in 2016, Chinese brands had cornered over half of the smartphone market by shipments to India. Also, for the first time on record, there were no Indian companies ranked among the top five smartphone sellers in the country during the most recent quarter of business. As the Chinese smartphone brands capture the Indian territory, it is interesting to find out what’s going wrong with the Indian players and their strategy? Can they ever fight back their contenders and win the smartphone battle?

Undoutedly, the sales of Chinese smartphones are on the rise due to the growing acceptance of brands like Vivo, Oppo, Huawei, Xiaomi and Lenovo. Also these smartphones comes with decent specifications and reasonable pricing making them well accepted in the value-conscious market of India. 

India’s smartphone user base topped 300 million in 2016 with the market growing by 18 percent led by the Chinese brands such as Vivo, Oppo, Lenovo and Xiaomi, says a latest study by Counterpoint. This is as compared to the global smartphone market which grew by three percent. (Click here to read more).

The research firm said in the October-December quarter, the Chinese brands contributed to 46 percent of the total smartphone market where no Indian brand featured among top 5 smartphone brands for the first time ever. The study states that it is largely due to rapid expansion of the Chinese players that continue to expand their presence throughout India, riding on aggressive portfolio strategies and substantial marketing spends. 

This success drive of the Chinese vendors on the Indian soil has added to the woes of the market of home-bred companies including Micromax, Intex, Lava, Karbonn and LYF.

What brings this trauma to the India players:

In 2015, Micromax vaulted past Samsung and grabbed the top spot in Indian smartphone brand, but by March 2016, its market share has nearly halved.

Chinese smartphone vendors have an edge over the Indian players as the processor companies like Intel or Qualcomm or Spreadtrum or MediaTek manufacture in China. Hence processors are cheap.

No displays or panels are manufactured in India as well.

On top of that there are no great R&D facility available in India. Cost reduction has thus become a huge advantage for Chinese manufacturers.

Smartphone players including Oppo, Vivo, Huawei, Xiaomi have their own patents. After all they have invested millions of dollars in R&D to make new and Innovative products.

At one time, we may think then why are Apple’s iPhones still progressing when they are manufactured in China. Well they are only manufactured in China, but is designed in its country with state-of-the art R&D facility.

Can ‘Make in India’ help?

Now, lets take a look at ‘Make in India’. Well there are some industry experts who say that the initiative may turn out to be more of ‘assembled in India’ than actually ‘Make in India’. There may be companies which may just pretend to be manufacturing to avoid the 30 percent tax cap.

Of course, there are companies who are manufacturing in India like Foxconn and Lenovo and Motorola.

A company requires hundreds of components to manufacture a full-fledged smartphone. When Indian companies import these components to give shape to smartphone we can well imagine what cost it incurs. Obviously, vendor who sells the smartphone cannot sell it cheaper than the production cost, this makes things tough for them. Here the China- manufactured phones gets the extra advantage.

Oppo is offering a front flashlight camera phone at a price which Indian phone makers can only look up to. Now, for consumers ‘Made in India’ or ‘Made in China’ is irrelevant provided they offer quality, cost- effectiveness, reliability, performance, and service.

Some experts opine that we need component manufacturers first rather than phone companies.

Be it for ‘Make in India’ or just technology boom in India, if there are components manufacturing in India, we may soon see the Indian smartphones scripting a new success story. And not just that, even new players will ring the Indian mobile phone market in the near future, believe experts.