What’s Next for Chinese Smartphone Makers in India?

How many Mi fans and Huawei fans are there in India? These are anyone’s guess.

We can see through reports, however, that the competitiveness of Chinese brands in the Indian smartphone market is escalating, regardless of the price range. Chinese brands like Xiaomi, Huawei, Honor are changing the consumption mindset of Indians. The continuous upgrading of product lines, marketing and brand promotion provides another perspective for us to understand the reality of how Chinese smartphone brands are performing in the Indian market.

Two news models anticipated by India netizens

One week after Huawei P20 was released on April 12th, Honor 10 was unveiled at the Shanghai Oriental Sports Center with a price tag of 2599 yuan ($411) for the 64GB version and 2999 yuan ($474) for the 128GB version. Many Indian media have been paying close attention to the release of Honor 10, predicting that it will be released on a global scale, and thus bound to come to India.

Some media also forecast that Honor 10 will be priced at less than 25,000 rupees ($376) in India, a predication welcomed by many Indian netizens. “For a mobile phone from Huawei, this price range is very enticing.”

However, there were no tweets on the release of Honor 10 by the official twitter account of Honor India on the same day. The twitter was still flooded with news about Honor 9 Lite, Honor 9i and Honor 7X.

The release conference of Honor 10, photo by Muzi

On the other hand, Huawei’s new flagship phones will soon be available in India. Indian media report that the P20 series will be sold locally starting April 24th, and the price is expected to be between 60,000 to 65,000 rupees ($902 – $978).

Although Huawei is launching the P20 series in India, some India netizens are raining on their parade, arguing that “mobile phone at such high price will definitely meet their Waterloo in India.”

It is reported, however, that the phones being released in India this month are the P20 Pro and the entry-level P20 Lite, rather than the P20. When searching for “Huawei P20 Lite” on Smartprix, an India online shopping website, you will find P20 Lite is expected to be sold at 24,999 rupees ($376). Indian media are very optimistic about the sales of P20 Lite, and predict it will exceed sales of P20 Pro.

The expected price of Huawei P20 Lite on Smartprix

On the official twitter account of Huawei India, a large number of netizens are asking for the Indian release date and price of P20, expressing their anticipations. “I can’t wait to buy a P20!” “I hope Huawei could set P20 at a reasonable price, not like other brands. I can’t wait to have one.” As seen in the comments left by Indian netizens, the price of Huawei P20 will determine its success in the country.

Huawei currently leads in the Chinese smartphone market, and their Honor brand also ranks first in China’s Internet phone industry. According to Indian media, both Huawei and Honor will go full speed ahead in the Indian market this year. Previously, Xiaomi, OPPO, and Vivo have gained brand awareness and considerable market share in India, maybe the release of Huawei P20 and Honor 10 will bring about some changes to the Indian smartphone market.

Which Chinese brands has the largest number of India fans?

It is said that Xiaomi, Oppo and Vivo attract the most amount of fans in India, but is it true? Let’s look at some data on some statistics, as Huawei, Xiaomi, Oppo, Vivo, Motorola and many other Chinese smartphone manufacturers have set up official Indian twitter accounts.

The performance of Chinese mobile phone brands on twitter in India. (by 11 a.m., April 20, 2018)

Data show that for the number of followers, Xiaomi and its sub-brand Redmi rank among the top four, while Huawei and Honor are lagging behind.

We notice that the most important reason for Huawei’s low-ranking is price. India is somewhat like the Chinese market a decade ago where users are extremely price sensitive. The reason Honor is ranked lower is because it entered India relatively late. Its rank is expected to change drastically in 2018 based on their actions and the intense media coverage.

As for the reasons why Xiaomi achieved rapid growth in India in the past two years, India media believe it is largely due to its excellent performance in the mid-range smartphones (priced at 10,000 to 20,000 rupees or $150 to $300). It seems like Xiaomi always has more fans than its competitors at the same price range.

How can Chinese manufacturers win over 70 million new users

On the global scale, the U.S. and U.K. smartphone markets have been experiencing negative growth since 2013, and China’s mobile phone market has been declining since 2017 after an explosive growth starting in 2013. The Brazilian market is growing steadily but only the Indian market is growing vigorously.

Global smartphone market share in 2011, 2013 and 2017 (by country)

In fact, most Indians still do not own smart phones. Peter Richardson, the research director of Tech Strategies, pointed out that, “in the next few years, the India smartphone market is expected to usher in rapid development with 20 percent annual growth rate, making it the fastest growing market among the world’s ten largest smartphone markets. China is indeed the world’s largest smartphone market, and its smartphone sales is about 470 million units per year, three times that of India. However, the development of the Chinese smartphone market has been fairly stable, while the Indian market is growing rapidly,” he stressed.

In 2017, the India market accounted for about 10 percent of the global smartphone market, with a growth rate of 14 percent and mobile phone shipments of 124 million units. According to Counterpoint Research, there were 70 million Indians who used a smartphone for the first time in 2017, and the number of Indian smartphone users reached 370 million in the same year.

Chinese mobile phone brands takes up 54 percent of the market share, up 34 percent from the same period last year. It is worth mentioning that four of the top five mobile phone brands in India are Chinese brands.

In 2017, four of the top five mobile phone brands in India are Chinese brands, the only exception was the Korean manufacturer Samsung who ranked first. (source: verdict. Co.uk)

In Q4 of 2017, Xiaomi replaced Samsung and became the number one smartphone vendor by shipments in India for the first time. Xiaomi entered the Indian market just three years ago, while Samsung has been in India for more than 20 years. Xiaomi achieved a staggering 259 percent growth in India in 2017 and now occupies almost a quarter of India’s market share.

Lei Jun and Manu Jain, managing director of Xiaomi India Source: indianexpress.com

In addition, according to data released by some market research companies, Vivo, Lenovo and OPPO also have eye-catching performances. In dealing with offline sales channels in India, OPPO and Vivo have been using measures they used in China on India. Perhaps in 2018, Huawei will also rank among the top five market share holders.

India in April: a carnival for Chinese brands

The launch of Huawei’s P20 and Honor 10 was very eye-catching, but Xiaomi also unveiled their new flagship phone on March 27, the MIX 2S, which will soon be available in India. The 64GB model is priced at 3,299 yuan ($521), 128GB at 3,599 yuan ($569) and 256GB at 3,999 yuan ($633), which is not cheap for the Indian market.

Xiaomi MIX 2S Source: xda-developers.com

Vivo also launched Y71 in India on April 13, at 10,990 rupees ($165) with sales starting on the 16th. OPPO launched OPPO F7 for 21,990 rupees ($329) on the Indian market on June 16 with sales starting on the 21st.

Meanwhile, Meizu quietly launched Pro7 at 22,999 rupees, or about $344 in India earlier this month. Perhaps because the model was released in China as early as August 5 last year, Meizu was low-key about the release.

Still, the move has met with heated criticism. “Is Meizu crazy? This is the Indian market afterall…” “Poor Indians, they can only have leftovers.” Some Indian netizens said, “Pro7 is not targeted at the Indian market, and Meizu just wanted to clear out thier inventory for the new flagship model to be released this month. Besides, Meizu mobile phone has good quality.” It is hard to tell such explanation is praising or criticizing Meizu.

Of course, many netizens also expressed their love for the phone. A netizen also make a fair comment, “Can Meizu build a good brand image in India by what they’ve done? Absolutely not. Many enterprises are now very serious about the Indian market, because of its huge consumption potential. If Meizu hopes to win in India, they must take India market seriously.”

Judging from what Chinese mobile phone brands have done this month, they have reached consensus on this point. At the end of 2017, Lei Jin set the target for 2018: to ship 100 million units and to become a Fortune 500 company. The Indian market is crucial in achieving this goal.

Manu Jain, managing director of Xiaomi India, also said that Xiaomi’s annual revenue in India has exceeded $1 billion and will soon exceed $2 billion. However, it remains to be seen whether Xiaomi will be able to keep its top position in India, as brands such as Huawei, OPPO and Vivo continue to move in on India.

Conclusion

Faced with the downward pressure of mobile phone shipments declining in the global market starting in 2017, phone manufacturers are now met with a new challenge which is how to find more potential blue sea market.

India is becoming the next Chinese market. There is a large number of young consumers who change smartphones frequently. Unlike the Chinese market, the growth space for India’s mobile phone market has only just been tapped. Huawei, Xiaomi, OPPO, vivo and Samsung all desire to share a piece of the market. And it remains to be seen how Chinese mobile phone makers will be able to push the market forward.

This article originally appeared in dongdong_note and was translated by Pandaily.