Chinese smartphone-makers dominate India market as numerous brands disappear

The smartphone industry in India saw numerous brands disappear as a number of phone-makers exited the market between 2015-17. The number of new entrants also halved during the period, according to an Economic Times report. The entry and exit figures reflect how competitive the sector has become, making it difficult for weaker players to sustain in the market.

Chinese companies including Xiaomi, Oppo, Vivo, Huawei and South Korean giant Samsung have the lion’s share in smartphone sales. Together, in 2017, their market share increased to 72 percent, from 63 percent in 2015.

Market research firm Counterpoint Research revealed that 15 brands enjoyed 90 percent of market share. However, experts were of the view that as some of these brands would exit the market, the remaining players would further consolidate their position.

“The fast changing dynamics and fierce competition in the India smartphone market will lead towards consolidation in the market,” Shobhit Shrivastava, research analyst at Hong Kong-based Counterpoint Research, was quoted as saying.

While Chinese brands are gaining a foothold in the Indian market, domestic brands such as Micromax, Intex and Lava have fallen out of the top-five on the list. Further, experts suggest that the top 15 device manufacturers were well-positioned and would sustain in the longer run. On the other hand, Counterpoint pegs the market to see five new entries with 10 exits in the near future. Remarkably, brands such Apple, Motorola/Lenovo, Nokia, OnePlus, and Lyf were not part of the top five smartphone brands.

“Smaller players are struggling to set up local level manufacturing, especially after the 10% duty on printed circuit board (PCB) assembly, since they don't have enough volumes to justify large investments. Due to competition, they cannot raise prices,” said Jaipal Singh, senior market analyst at International Data Corporation (IDC) India.

However, analysts cautioned that with the presence of a strong player like Xiaomi in the Rs 10,000-device segment, new entrants will find it difficult to compete. Certain things that make the segment more competitive for manufacturers is wafer-thin margins and cut in vendor commissions, that make spending on marketing and sales more unviable.

“The sales channels have changed, there isn’t anyone now who can spend like Oppo and Vivo did, going into the deepest pockets and giving shopkeepers rentals to put up their glow signs. Now, even Oppo and Vivo have curtailed spends,” Singh added.