At 400 million, India has the second-largest number of smartphone users in the Asian region after China. While among telecom service providers its homegrown players such as Jio and Bharti Airtel which are calling the shots, when it comes to the handset market, its Chinese dominance all over.
With every passing year, Chinese mobile phone brands are strengthening their grip over India’s smartphone market with Xiaomi recording its highest ever shipments in India in the second quarter of 2018 and its onslaught continued in the third quarter. In fact, in less than three years, Xiaomi has toppled market leader Samsung from the top perch. According to data from research firm Counterpoint, from 9% share in 2016, Xiaomi more than doubled its market share to 25% by the end of 2017, toppling Samsung and further widened its lead in 2018. While the top five brands account for 77% of the smartphone market, interestingly, of the five, barring Samsung, the rest are all Chinese.
In Q3 of the current year, homegrown Micromax managed to stage a comeback after two years with 9% market share, after being knocked off the top five slots. However, it is unlikely that the desi brand will manage to hold on its position given that what worked in its favour in Q3 was a huge order for five million handsets from the Chhattisgarh government, according to Counterpoint. With Indian consumers increasingly veering towards the Chinese, Micromax has clearly lost the plot.
The big reason that Xiaomi has managed to make inroads is because it has strong offerings with latest features in the Rs.10,000 to Rs.15,000 segment, which accounted for one-third of the total volume in the third quarter. Given that Indians have spent Rs.500 billion on buying the top four Chinese phone brands, Xiaomi, Oppo, Vivo and Honor in FY18, it's unlikely that the statistic is going to change anytime soon. The only hitch for the Chinese handset makers is that if the rupee continues to remain weak, they won’t be able to hold on to their aggressive price points post the festive season. However, the brands are looking to overcome the challenge by setting up manufacturing plants in India, which is expected to see smartphone users hitting 600 million over the next three years.