Smart phone manufacturers from China are gradually becoming a significant player in the Indian market. They have not yet made it to the list of top 5 brands but they have begun denting. Almost 15 Brands like Lenovo, Vivo, Xiaomi, LeEco, OnePlus, Oppo, Huawei, etc. have risen to the fact that India is the second largest smart phone market on the planet. There are a variety of reasons for this influx:
Saturated China: China has reached a saturation point, in other words, smart phone sales are barely budging; driving the prices down. It could be because of the economic hiccup in their country but the fact remains, that first-time smart phone buyers have dwindled. ‘Quick to seize an opportunity’ tactic, propelled the world’s biggest tech companies to look beyond its national boundaries.
Logistically efficient: in America, half of mobile sales occur through carrier stores. Which means keeping a strong relationship with the carrier and incurring huge expenses for being certified by the carrier. It’s much easier in India, independent retailers and distributors play a major role in selling handhelds. Now the Chinese brands are cleverly and efficiently handling online media. Creating the necessary hype and recognition around the brand, logistics being handled by the e-commerce company in exchange for exclusivity and doing away with offline distribution system kept the cost under control. In addition, online shopping saw a major jump in online sales of smart phones since 2015.
Networking similarities: Eureka moment! Chinese phones are compatible with the networks in India; using 2300MHz band and 1800MHz band for 4G network. Thus making available 4G ready devices on demand. These brands command a good share of smart phone market in India. As for 3G, China used TD-SCDMA technology and India used WCDMA technology. With a little tweaking from China Unicom, same technology got deployed in both places.
Patently yours: acquiring patents is comparatively easier in India than US or UK. As of date only ZTE and Huawei has created an impact outside its home turf. Being a telecom equipment vendor helped them do so. They could amass a lot of patents to defend themselves in the international market. The Huge expense incurred in creating and maintaining patents is the major reason stopping the other Chinese manufacturers from expanding to Europe and US markets. Even in India, Chinese Companies have been on the wrong side of the legal system, but it’s simpler.
Make in India: Modi Government’s Make in India campaign has further boosted the prospects of Chinese brands entering India. The government has removed all hindrance and caps surrounding Foreign Direct Investments and Sate government providing more incentives, the manufacturers can enhance India’s economy. Some of these brands from China have already started operations in India.
· Xiaomi has already started assembling devices in India
· OnePlus is already shipping a major percentage of its devices to India.
· Lenovo too is in talks with a Singapore based Company to start assembling operation from Chennai.
· Manufacturing in India is also on the cards of Meizu; a Guangdong-based smart phone manufacturer.
· Other leaders in the China market like Oppo, Vivo and Coolpad have pledged to start either manufacturing or assembling units in India.
Room for growth: A very small part of the Indian population owns a smart phone, as compared to a larger population globally. There’s indeed lots of room for expansion in India. With hundreds of millions of potential new customers, the volume of users wanting to upgrade from a basic phone to a premium one; India has become the second largest smart phone market after China.
Secondly, sales are flattening globally and India is zooming to a double-digit growth. Thus tech companies are rushing to seize this period of growth and transition. Lenovo has already captured an enviable part of the market but Xiaomi is the most recognized Chinese brand in India. Similarly, other companies are setting ambitious targets for themselves.
Chinese smart phone received a very warm welcome in India as it delivered a very cost-effective, high-performance phone. Whether it is cheap marketing strategies adopted in India or low-cost labor in China; whatever be the reasons, Chinese brands have emerged as the preferred one over Indian and multinational brands.