The Chinese smartphone brands have disrupted the business structure of smartphone distribution in India
The Chinese smartphones with brands such as Oppo, Vivo, Lenovo and Xiaomi continued to grow at the expense of the Indian brands including Micromax, Intex and Reliance Jio that earlier had featured in the top five smartphone brands in India.
The fourth quarter of 2016 saw Chinese brands capturing 46 per cent of the total smartphone shipment, up from 14 per cent a year ago, according to a recent Counterpoint Research report.
While the brunt of demonetization had its impact on Indian players, Chinese smartphone brands continue to expand their presence throughout India, riding on aggressive portfolio strategies and strong marketing.
Samsung held on to the No. 1 position with 24 per cent share and Vivo took the No. 2 spot with a 10 per cent market share in India. It was followed by Xiaomi and Lenovo (which includes Motorola) winning nearly 9 per cent share each.
Next in line was Oppo at fifth rank with 8 per cent market share.
Overall Indian smartphone market share in 2016, Micromax stood at No. 2 spot with 11 per cent share. While Intex was at No. 4, ending the quarter with 7 per cent market share, followed by Reliance Jio’s LYF mobile with a 6 per cent market share.
The success of these Chinese brands was attributable to a variety of factors including strong marketing and channel push, as well as better access to components that were in limited supply. As a result, the Chinese brands capture close to 50 per cent of the market share,” as per the report.
For instance, Oppo’s intensive brand building – sponsoring popular TV shows and signing up local celebrities Hrithik Roshan and Sonam Kapoor – has paid off really well.
Changing Business Mix
Meanwhile, Intex Technologies is changing its product mix by expanding its consumer durables range. Nidhi Markanday, Director & Business Head (Consumer Durables & IT Accessories), Intex, says: “About 85 per cent of our business comes from the mobile phones and the rest from other segments, including the recently ventured into con¬sumer durables and IT accessories.”
The company is looking at changing this mix to 75:25 this year and to 50:50 over the next few years, as it expands its con¬sumer durables product range.
A majority of Chinese smartphone companies had opted for online channels for their market entry. It is quite obvious as one in three smartphones sold in India last year were sold through e-commerce channels, with Flipkart accounting for about half of all smartphones sold online.
According to Counterpoint Research, smartphone vendors in India have been pushing their e-commerce strategies, which has not only allowed newer brands to offer attractive pricing, but it also has driven e-commerce to become an important channel to distrib¬ute and sell mobile phones in India.
India is the second-largest number of smartphone users in the world, besides China, but only 40 per cent mobile phone users own a smartphone. So, there is a clear scope for deeper penetration into the country and winning the battle.