Chinese Aggression In Indian Smartphone Industry – A Tech War?

We’re not talking about technological warfare in this article. But, in a way, there is an ongoing battle between Indian players and their Chinese counterparts. That is when we speak of smartphone sales. What prompted the clash? Let’s find out.

A First: No Indian Companies in Top 5

The tech world – at least in India – is currently in a state of confusion. The commotion was fueled by recent reports published by the International Data Corporation (IDC). The summary? No Indian company made it to the list of the top five smartphone manufacturers in India.

It might sound absurd, but it’s true. And what replaced the local players among the ranks are the Chinese manufacturers. Here’s the list:

  1. Samsung – 28.1% market share (in 1st quarter of 2017)
  2. Xiaomi – 14.2%
  3. Vivo –  10.5%
  4. Lenovo Group – 9.5%
  5. Oppo – 9.3%

Samsung, a resilient brand established in South Korea, did not budge. But all Indian smartphone companies took the back seat. It’s also feared that this trend will continue. In fact, Chinese manufacturers have already dominated since the last quarter of 2016. A sad reality, but there is a reason behind these circumstances.

A Strategy: Aggressive Chinese Phone Makers

Locally-produced gadgets are supposed to be less expensive. For instance, there are smartphones below 3,000 RS in India. Now, think about this: if Indian consumers can buy a phone for such a small amount of money, why opt for a Chinese brand?

Apparently, it’s because of the aggressive strategy of Chinese manufacturers. That is, they sell their phones at a much lower price. As long as it’s affordable, consumers may not care about the origin of the product. So, whether the smartphone is made in China or India, consumers will make the purchase because of being affordable. In the end, the cheaper unit wins.

Aside from the economical prices, Chinese manufacturers continuously improve their smartphones. Take for example their quick adoption of 4G technology. Additionally, Chinese companies put greater emphasis on the smartphones’ cameras. Such move is a good strategy, given that mobile photography is widely popular nowadays.

smartphone industry

A Rise in Sales: Chinese Phone Domination

There is a significant rise in the sales of China-made smartphones in India in the last quarter of 2016. According to the IDC research, the combined shares of the leading Chinese companies reached a growth of 46%. Their shipments also doubled in the said period. The growth increased during the first quarter of 2017. IDC reports show that Chinese phone manufacturers posted a 51.4% share of the total shipments in India.

Probably, one of the most notable increases is the sales growth of Xiaomi. The company was not in the top 5 list in the first quarter of 2016. But by 2017, the manufacturer managed to become the second leading player in India. In figures, that’s equivalent to a 14.2% market share. Xiaomi’s budget offerings also remain successful in the market. For instance, the Redmi Note 4 (9,999+ RS) was the highest shipped smartphone in the country in the first quarter of 2017.

Another factor that boosted sales for Chinese phone makers is online selling. Xiaomi and Lenovo dominated this field with a 31.2% market share in the last quarter of 2016.

Tough Times: The Indian Smartphone Slump

In contrast to Chinese phone makers, Indian manufacturers have been experiencing a slump in sales. For instance, the market experienced a 20.3% decline in shipments in the last quarter of 2016 as compared to the previous period.

The situation worsened at the start of 2017. Companies like Micromax, Lava, Reliance Jio, and Intex control only 13.5% of the smartphone market share in the first quarter. Indian manufacturers also failed to fully tap online sales.

Aside from the continuing slump, Indian phone makers face an intense competition from China-based vendors. The latter’s aggressive expansion is a major challenge for the local players.

A Petition: “Anti-Dumping Duties”

As an answer to the dramatic loss, Indian phone makers are seeking government action. Companies are particularly calling for “anti-dumping duties” on Chinese smartphones. These levies, according to local manufacturers, may be imposed even for phones that foreign investors assemble in their country. They say that the proposed taxes will compensate for the financial support, which Chinese companies received from their own government.

So, are China and India currently in a tech war? From the looks of it, there is indeed a friction between the companies. Well, it’s only natural for manufacturers to compete with each other. However, Indian players should act fast before the Chinese phone makers totally invade the local mobile market in India.

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About the Author: Shameem

I am Shameem, Software Engineer, Web Addicted, Living in Chennai, India.

5 Comments

  1. hi Shameem,
    this is the second article I am reading, written by you.
    first one was trends in beard style.
    nice and informative article.
    kee up the good work.

  2. Hi Shameem,
    India is just one of many markets in which Chinese manufacturers are winning market share. In fact in most of the underdeveloped and developing world, Chinese smartphone manufacturers are gaining market share. Finally, Chinese smartphone manufacturers are also gaining market share in the global market and giants like Samsung and Apple will soon have to work hard to keep their lead in the global market.
    Very nice post.

  3. Chinese phones have a lot better specs than other and build is also good. So helping the citizens only.
    We should start making out own phones. Micromax is a Indian Company but then they are just re-branding the phones not producing on their own

  4. Chinese Phones make possible to purchase smart phones for poor persons just like the world leading companies like Samsung and iPhone. So thumbs up for new enrich chinese cell phones

  5. It’s true that Chinese tech companies are rising extremely rapid by their valuable price, and it is reasonable that they want to expand the third-world market.

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