75% of the Indian Phone Market is captured by two Chinese Brands

India is one of the biggest markets for smartphones which is not surprising since the number of smartphone users is very huge in India. The landscape of the smartphone market in India started changing by 2014 when a Chinese smartphone brand called Redmi entered India with Mi 3. It was loaded with features while offering […]

Chinese brands overwhelming share in Indian smartphone market

India is one of the biggest markets for smartphones which is not surprising since the number of smartphone users is very huge in India.

The landscape of the smartphone market in India started changing by 2014 when a Chinese smartphone brand called Redmi entered India with Mi 3. It was loaded with features while offering it at a less price compared to the existing competitors like Samsung.

Mi 3 was first launched in India in September 2014 and was an instant hit

Redmi Mi 3 was an instant hit. People flocked to buy this smartphone and here onwards many Chinese brands like Oppo, Vivo entered the scene and disrupted the Indian market.

Fast forward today, the top 2 brands in India are Xiaomi and Samsung, each having close to 20% market share.

Market share of brands in the Indian market in 2021?

Indian smartphone market saw a shipment of over 48 million units in the third quarter of 2021. Although this is a 12% decline compared to last year.

In Q3 2021, Xiaomi (includes POCO as well) had a market share of 23.4% and Samsung held a market share of 16.9%.

Vivo and Realme held third and fourth place with 16.4% and 15.7% market share respectively. Oppo came next with a 10.7% of market share.

Apart from these, other brands like OnePlus and Apple saw a significant rise in their sales with the newer Nord 2 and price drops in iPhone 12 and iPhone 11 series.

You might be wondering which 2 companies hold almost 3/4th of the Indian market.

Don’t let the number of companies in the Indian market fool you. Oppo, Vivo, Realme, OnePlus and iQOO comes under one parent company called BBK Electronics.

Under Xiaomi comes Mi, Redmi and POCO branded phones which hold more than 20% of the market share.

Xiaomi and BBK Electronics are the two companies that together hold around 75% of the smartphone market share in India. 

Sub brands of the Xiaomi and BBK electronics

Samsung is the only non-Chinese company that has a significant hold in the market. With the success of their Galaxy Series (A, M and F) phones, Samsung has managed to be on the top of consumers’ purchase decisions.

In the premium segment, Apple and OnePlus were leading with Apple on top and OnePlus in the second position. In the price band of 10000-30000, Samsung led the market.

What makes Chinese brands so popular?

Chinese phones started entering the Indian market in 2014. At this point in time, Samsung was at the top with many Indian brands like Micromax, Karbonn having a significant market share.

By the start of 2015, Redmi had gained a foothold in the market with close to 5% market share. As time passed, brands like Oppo, Vivo started gaining popularity.

What made them an instant hit in Indian market?

There are several reasons why they were so popular but the major reason was super aggressive pricing with loaded features.

Overdeliver, Underprice

Compared to the prices of other competitors, Redmi was offering a smartphone with the latest hardware specifications at the lowest prices.

The price range of 10000 to 15000 was very popular (and still is) and Chinese brands targeted these price segments. They went all the way to provide the latest hardware competing aggressively with established market leaders like Samsung and Micromax.

Coming of 4G

By the time Chinese smartphones were flooding the Indian market, Jio revolutionised the telecom sector. Reliance Jio enabled 4G back in 2016 with extremely low prices (free data when it launched). This made the smartphones more valuable since you could do most of the things with your phone.

Entry of Jio 4G

Chinese companies saw this as an opportunity and launched several 4G devices while the Indian companies didn’t actively take this step mostly because they didn’t think 4G would be adopted by India so quickly and mostly it increased the price of their phones if they included 4G capability.

With 4G on the rise, consumers in India obviously turned to the companies which made 4G devices and this opportunity gave Chinese brands more foothold.

Marketing

They spent a lot on marketing their products. Oppo and Vivo are especially notorious for their often over-the-top marketing both locally and digitally.

They created a FOMO (Fear of Missing Out) around their products with Flash Sales which turned out to be very successful as their products sold out in minutes.

When they started out, their phones weren’t polished as they are now. They lacked in the software departments. Their UI wasn’t so polished, it had a lot of bloatware and also had security issues.

But they went all-in with hardware (latest but cheap) and knew exactly whom they were targeting. Most of the users were only concerned about having the most megapixels in their phones with the biggest RAM size possible. These consumers were their primary target.

Chinese brands capitalised on this and gained a solid fanbase. As they raked in profits, they slowly killed competition and eventually improved on their products.

The fate of US and Indian brands in Indian market

Google Pixel 5a was launched in India in 2020

Indian companies are all dead in the face of competition from Chinese phones. The only US company which is doing good in the Indian market is Apple. Another US brand, Google (Pixel) hasn’t launched its new flagship phones in the Indian market since Google Pixel 5a in 2020.

Although Google phones are popular the reason for Google not to release any more phones in India are multifold. A few major reasons include the ongoing global semi-conductor shortage and the lack of manufacturing units in India which will help them reduce the price and compete more aggressively.

US brands like Apple and Google have a good market share in their home country and they are standing their ground against Chinese companies.

On the other hand, Indian phone makers like Micromax, Lava and Karbonn had a good market share until 2015-16 but soon died because they couldn’t survive the competition from the Chinese companies.

Micromax recently tried to make a comeback with new budget phones but the response was mixed in the market. Their new phones, Micromax In series sold quite a number of units but wasn’t able to capture more than 1% of the total market share in 2021.

Micromax newest models which had mixed responses in the Indian market

Chinese companies come up with the latest hardware with the most aggressive pricing and that makes brands like Google hard to get a hold in the market. Brands like Google offer great specs but not competitive pricing or provide budget offerings with weaker specifications.

When Chinese “feature-loaded” phones started raining in the Indian market, the market became notorious for demanding only the latest of the specs at the most economical price.

Though the latest hardware specs weren’t always better at budget pricing. People loved to flaunt 32 MP dual camera in their phone even though it didn’t perform better than, let’s say, an 8 MP camera on an iPhone or a Google Pixel.

This is not just in India, this is a global phenomenon

The rise of Chinese brands in smartphones did not just happen in India, this happened in every major market. Even in the US and European smartphone market.

Although in the USA, the presence of Apple has deterred the growth of Chinese giants like Xiaomi and not allowed them to gain a major foothold but, Chinese smartphones still have a significant presence.

However, the story in the European smartphone market is somewhat similar to that of India. While Apple and Samsung are at the top, Xiaomi, Oppo, Huawei, Honor, OnePlus, Realme, Honor made up around 32% of the market share as of Q1 2021.

In short, every major market has a significant amount of Chinese brand share but in India, it is especially bad. Without the competitive presence of any other non-Chinese brand or homegrown brand, the situation will remain the same.

Did every Chinese company do the same thing as Oppo and Redmi and succeed?

Although, it doesn’t always guarantee that every Chinese brand will have a great time in the Indian market. Various Chinese brands other than Oppo, Vivo, Redmi have come into the market but failed to succeed.

10.or, Honor, Huawei, LeEco and Coolpad had a very short run in the Indian market and didn’t see the success Redmi or Oppo did.

Conclusion

It is actually worrying that almost 3/4th of a huge market is dominated just by two big companies from the same country (a foreign one). Chinese companies have managed to kill all the competition and create a loyal fan base in India.

Honestly, when the competition is low the innovation in the industry is also low. Brands recycle the same formula and sell a wide range of products with few specifications changed around.

It has become quite difficult to distinguish between phones from Oppo, Vivo, Realme. Every phone more or less looks similar, feels similar and mostly have similar specs.

Will there be any Indian or non-Chinese brand to topple the empire of smartphones? We just have to wait and watch.

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