India’s Ongoing Covid-19 Catastrophe Presents Challenges for Chinese Smartphone Makers

The tragic surge in Covid-19 infections across India, the second largest mobile phone manufacturer after China, has led to lower manufacturing output than expected, complicating the operations of a range of Chinese smartphone brands.

Reuters reported that the official toll of India’s coronavirus infections today stands at 21.49 million, with recorded total fatalities having reached 234,083.

Researchers at Counterpoint predicted that due to the latest round of lockdowns in New Delhi and Mumbai – both of which typically enjoy large smartphone sales volume – the total shipment of Chinese smartphones to India between April and June will be about 5 million units, decreasing from 25% to 15%.

“As an important smart phone production base in India, Noida has attracted more than 100 Chinese factories set by Transsion, Oppo, Vivo and Holitech,” Yang Shucheng, secretary general of the India Chinese Mobile Phone Enterprise Association, said in an interview with IT Times. “Since the outbreak of epidemic in India, only 30% of Chinese employees have chosen to stick to their posts. At present, the output has been reduced by 40%, which is mainly caused by the epidemic crisis and chip shortage.”

India has been crucial for Chinese smartphone makers seeking growth amid market saturation back home. According to Strategy Analytics, the Indian smartphone market grew by 26% in the first quarter of 2021. During this period, Xiaomi represented the country’s top smartphone maker with a market share of 27%. Vivo, Realme and Oppo, all owned by Chinese conglomerate BBK Electronics, also placed among the leading five smartphone brands, after Samsung.

Xiaomi‘s financial report for the fourth quarter of 2020 shows that its total revenue last year was 245.87 billion yuan, of which the proportion of its overseas market revenue increased to 49.8%, due mainly to growth in India and Europe.

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The electronics giant has actively donated to help India fight the raging epidemic. In April, Xiaomi India donated a total of 130 million rupees ($1.77 million), part of which was devoted specifically to purchasing oxygen concentrators for hospitals across the country.

On April 29, a director of Vivo told Times Weekly that although India’s recent surge in Covid-19 infections impacted the company’s business in the country, their factories continue to function well due to comprehensive prevention measures. Realme also noted in a statement that employee health and safety is of utmost importance to the company.

Compared with mobile phone manufacturers boasting high-quality online channel layout, those relying on offline markets may suffer greater loss. Coping with the epidemic represents a big challenge for Chinese smartphone makers attempts to gain a firm foothold in the Indian market.