In recent years, some emerging markets like China, Indonesia and India have became the key driver for the shipment growth of the smart phones. However, given the domestic market is becoming saturated, Chinese smart phone manufacturers stepped up efforts to open up overseas markets and India was considered as their first choice.
The latest statistics of India’s mobile phone market from International Data Corporation (IDC) showed China’s mobile phone market experienced a 4.3% decrease in shipment, which was the first time over the past six years. While at the same time, the sales of the smart phone in India increased significantly. In 2015, Chinese mobile phone has gained 22% market share in India, compared to only 5% in 2013, becoming one of the top-three brands with India’s local brands and Korean brands.
1. Hugepotential in Indian smart phone market
According to a report issued by IDC, although the market share of the smart phone in India continues to improve, the feature phone still occupied 65% of the market share in fourth quarter of 2015.
However, the latest report from a marketing research firm indicated that the users of the smart phone in India have outnumbered that in America at the end of last year. So far, India has have 0.22 billion users of smart phone, ranking second world while, just following Chinese mainland. With the second largest population in the world, India’s smart phone market is of huge potential. Another report from Counterpoint Research revealed that in 2015, India’s smart phone shipment reached more than 0.1 billion, increasing by 23% in comparison with last year.
In India, mobile phone priced at less than 100 dollars accounted for 50%. Most new smart phones listed in India are priced at between 60-70 dollars. However, “Devices used in the smart phone priced at less than 100 dollars are very prone to be out of order in 2 years.” said Ryan Reith, the person in charge of the IDC project. It means the users in developing countries replace their smart phone more often than those in developed countries, which will promote the shipment growth of the smart phone in these countries.
As for high-end smart phones, India also had a satisfactory market share. Apple sold 1.7 million iPhones from Oct.2014 to Sep.2015, witnessing a dramatic increase with 1.1 million year on year.
IDC’s report showed that in second quarter of 2015, India’s smart phone shipment increased by 44% year on year. to 26.5 million, Besides, the sale volume of Chinese smart phone in India was eight times that of the same period last year, in which MIUI, Huawei, Lenovo and Gionee contributed 12% market share in total in India.
In 2015, Lenovo did best among those Chinese mobile phone brands in India. In first quarter of 2015, Lenovo’s market share lagged behind MIUI, while in second quarter, it surpassed MIUI and ranked fifth with 6.4% market share. In fourth quarter, it retained its dominance and took 11.6% market share, moving up to third place. What’s more, Lenovo sold 12 million smart phones in India in the whole year of 2015, ranking fourth with 9.5% market share, after Samsung (20%, Korean brand), Micromx (17%, Indian brand). Besides, Chinese manufacturers like MIUI, Huawai, Gionee, OPPO, OnePlus, Coolpad, MeiZu and LeTv occupied 12.5% market share in India in just a few months. The sum of their sales exceeded that of India’s local mobile phone companies for years.
Another report suggested that in first quarter of 2016, the top-three fastest growing brands in India were all Chinese brands, including Vivo (759%), Lenovo (344%) and OPPO (183%).
2.Fierce competition between Chinese brands
It is no doubt that high transportation cost will affect the progress of expanding Indian market. Therefore, building factories in the local area will promote good sales of Chinese brands in India. In addition, Indian government always gives great support to local production or even localization of the products. New policy claims that the combined rate of mobile phone accessories like charger baby, USB and battery charge is 29.441%, but if they have their own factories in India, the import tariff is only 1%. Since the issue of this policy, many Chinese companies like OnePlus, MIUI and Lenovo built factories in India to reduce the cost.
“Foxconn cooperated with MIUI and built factories in Andhra, India in 2015 to produce mobile phones.”
“Huawei got India’s approval to build factories in Tamil Nadu.”
“OPPO worked with India’s local companies to produce mobile phones.”
“Vivo’s first assembly plant was established in Greater Noida, which is expected to produce 1 million mobile phones per month and create more than 2,000 job opportunities by the end of 2016.”
“Gionee launched its first‘Made in India’ smart phone in Visakhapatnam, India in 2015.”
“OnePlus announced to cooperate with Foxxonn and established factories to produce OnePlus mobile phones in India.”
“BBK plans to set up factories in India this year.”
“Huawei is planning for its entering Indian market and building factories in India may be involved.”