1. China nibbles at India: How Xiaomi, Vivo, Oppo are driving Indian companies out of their own smartphone market

China nibbles at India: How Xiaomi, Vivo, Oppo are driving Indian companies out of their own smartphone market

Chinese manufacturers have seen a 3.4 times year over year growth in market share in India, as Indian companies continue to be affected adversely.

By: | Updated: June 22, 2017 1:54 PM
Chinese smartphone manufacturers have seen a 3.4 times year over year growth in market share in India. (Source: Reuters)

Chinese smartphone manufacturers have captured 51 percent of the mobile phone handset market share in India according to a report. In the meantime, Indian smartphone makers have been adversely affected due to the rapidly increasing market share of Chinese players and fierce competition. A rating agency, India Ratings and Research (Ind-Ra) has said that Chinese manufacturers have seen a 3.4 times year over year growth in market share. According to the report, there is a complete change in the market position of the top five smartphone players in 2017. Indian companies like Micromax, Lava and Karbonn have been replaced by Chinese counterparts like Xiaomi, Vivo and Oppo.

Meanwhile, global electronics giant Samsung still remains the market leader with 28 percent share in the market, but the share of Indian vendors downsized to a mere 14 percent from 40 percent last year, according to the report. Lenovo has sustained its position due to the established brands and products in the diversified price segments. Oppo and Vivo India have recorded sales increases of seven to nine times this year respectively. The report by Ind-Ra expects Vivo and Oppo’s smartphone sales to rise by around 40 percent to 50 percent by 2018.

One of the biggest reasons for a boost in the sale has been attributed to Reliance Jio. The report said that Jio’s free data and voice services during the year pushed up the 4G Volte enabled smartphone demand. While average data prices dropped, it provided a stimulus to smartphone sales. Even the incumbent telcos also offered differentiated data offerings for 4G smartphone users, hence pushing a higher smartphone replacement demand as well as a faster migration rate from feature phones to smartphones. The Chinese companies saw this as an opportunity, and with aggressive marketing and competitive pricing strategies. they captured the budget and the mid-price segment which lead to market share gains. These reasons are in addition to various other factors, including superior product quality, big advertising expenditure, and debt-light capital structure in China, the report claimed.

Chinese players like Xiaomi has invested a lot in brand building and manufacturing facilities in India and that shows their long term strategic intent. Ind-Ra report says that established Indian vendors will face difficulty in sustaining, despite the early mover advantage and a more diversified product profile. Indian smartphone makers have been slow in reacting to ongoing product innovation in the market, and are further constrained by limited marketing budgets.

  1. S
    Sanchayan Sarkar
    Jun 23, 2017 at 11:38 pm
    Again there will be a debate about protectionism vs free compe ion. I think compe ion is the way to go as far as mobile markets go. Indian companies have to bring in quality to their game and produce high end phones. If they are unable to offer anything different from the present situation, it will be difficult Just going for cheap mobile phones will not result in fruits as far the smartphone market is concerned.
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      Nikhil kumar
      Jun 22, 2017 at 8:27 pm
      Yeah..Chinese..wait and enjoy until your father is back.."Nokia"..due to launch of Nokia 6 in China ..Chinese started investing market in India...just boycott Chinese...###hate u Chinese... Worst Chinese...
      Reply
      1. N
        Nikhil Kumar
        Jul 6, 2017 at 9:25 pm
        Why do the great gaundtvavadi veD1cks need a missionary company nokia to defeat chinese? Gom00tra dint help?
        Reply
      2. V
        VIVEK
        Jun 22, 2017 at 9:41 am
        If Chinese smartphone makers can provide high quality phones at a reasonable price, the customers are going to welcome it moreso.
        Reply
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          Mohan Sinnapillay
          Jun 22, 2017 at 9:08 am
          China want to take away land and support the main enemy of the country but Indians are smiling and buying their low quality goods. This shows the mentality of Indians , very little patriotism, self respect and no taste for quality.
          Reply
          1. T
            Tarun
            Jun 22, 2017 at 9:45 am
            Bro their phones are of better quality than ours.If u have patriotism why not go start a company which does better than them.Patriotism is having faith in our country and loving our fellow citizens. It doesn't mean hating other countries.
            Reply
            1. V
              Vaibhav
              Jun 22, 2017 at 4:20 pm
              Our smartphone companies like lava, intex, karbonn, micromax etc are so worst companies of the Indian Market they doesn't provide a normal faculty in comparison of Vivo And Oppo. According to me we had to banned these b s like micromax karbonn lava intex because they are making ashamed on Indian market
              Reply
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                patiala kh
                Jun 23, 2017 at 3:23 pm
                You have to use the products to believe. I have used both Xiaomi and Le Eco b s for more than 2 years without any trouble. At the price it's worth more than Samsung which costs atleast twice-thrice.
                Reply

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