5 years on, Chinese smartphones blow Indian rivals out of the water

Topics smartphones | Samsung | Xiaomi

Analyst firm TechArc predicts that Xiaomi, Realme and OnePlus will make further gains in 2019
From fringe players offering inexpensive phones to price-sensitive consumers, Chinese handset firms have risen to diz­zying heights, shedding their humble image to corner an unprecedented 60 per cent share of the smartphone market in 2018, routing Indian rivals. 

Data from Counterpoint Re­search shows, for the first time in a decade, the cumulative share of Indian brands has fallen below 10 per cent, from a high of 45 per cent in 2014. In 2018, not only were three out of every five smartphones sold here Chinese, only 9 per cent of all smartphones sold were made by local players.

Indian brands such as Micromax, Intex, Lava and Karbonn  gained early momentum in the race and captured the local handset market in the early 2010s. 

Coming up behind them slowly but steadily were the Chinese brands. They began picking up speed from 2015 while the Indian companies slowed down, eventually bagging a significant market share that no brands with a specific nationality ever could. The only example that comes close is the share captured by Finnish brands, thanks to Nokia. In 2010, at the height of Nokia’s glory, it had a market share in excess of 70 per cent in the then nascent Indian mobile phone market. 

According to analysts from Counterpoint Research, while Chinese brands have been steadily gaining share since 2015, the rise has been more pronounced in 2017 and 2018. From less than a 10 per cent market share in 2014, when all current market leaders — Xiaomi, Vivo and Oppo — started investing in India, their cumulative share went up to 54 per cent in 2017.

 In 2018, brands like Honor, Realme, Infinix, and Tecno from the house of three global majors — Huawei, Oppo and Transsion Holdings — further added energy to the leaders. While Tecno was the fastest growing smartphone brand in 2018, growing by 221 per cent, Honor and Infinix grew by 183 per cent and 146 per cent respectively.

Consequently, Huawei captured the sixth spot in the smartphone market in 2018, followed by Realme. Among the top five players, Xiaomi (1st), Vivo (3rd) and Oppo (4th) are Chinese. And while Samsung slipped to the second spot, Micromax managed to gain the fifth spot with a 5 per cent market share, thanks to government orders ahead of the Assembly elections in Chhattisgarh.

 Analyst firm TechArc predicts that Xiaomi, Realme and OnePlus will make further gains in 2019 while Vivo, Oppo and Huawei are expected to hold their ground.

The only comfort for Indian firms is the emergence of Reliance Jio in the handset space. The brand managed to establish itself as the first Indian brand to gain the top spot in the overall handset market in 2018 by creating a new segment — the smart-feature phone. Feature phones are a segment that still gives hope to local players like Lava that ended the year at the fifth spot with a seven per cent share. Together, local brands have over a 55 per cent share in the space. The rise of Jio resulted in the feature phone segment growing at a faster pace (11 per cent) than smartphones (10 per cent) after years.

According to TechArc fou­nder, Faisal Kawoosa, Jio Phones’ success may further delay the migration of feature phone users to smartphones. 

“Last year, many potential smartphone users stuck to Jio Phone due to its affordable offering. We now estimate the process to get further delayed by two years. The long-awaited shift of feature users to the smartphone segment that can give a boost to smartphone sales in India may take longer now”, said Kawoosa.

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