 "Chinese mobile makers make up for late entry")
Le Eco, which entered India in January, had a 1.4 per cent market share in January-June. Oppo and Xiaomi, which have been selling mobile phones in India since 2014, had 2.8 per cent and 4.2 per cent market shares, respectively, and Vivo had a 2.6 per cent share during the first half of 2016.
Xiaomi tied up with Taiwanese handset maker Foxconn last year to source most of its smartphones locally. Oppo will set up a plant in the country this year and Vivo unveiled its manufacturing unit in Uttar Pradesh in December.
"As these players scale up operations it becomes critical to avail duty benefits because they work on razor-thin margins," said Tarun Pathak, telecom analyst at Counterpoint Technology Market Research.
Le Eco would enjoy tax benefits of up to eight per cent of its cost of production, Atul Jain, the company's chief operating officer, said. Italian Compel Electronics, Le Eco's equipment supplier in India, will produce 60,000 handsets from the plant initially.
Local manufacturing allows Xiaomi to sell handsets at a minimum margin and Vivo estimates a 10 per cent cost saving by making phones in India.
HOW THEY FARE
- Late entrants like Le Eco, Vivo, Oppo and Xiaomi steals 11 per cent share of the market despite high competition
- Le Eco grabbed 1.4 per cent smartphone market share within six months of entry in India in Jan 2016
- It has sold one million handsets by offering five models, mostly online
- Cost benefits, speed to market and increasing scale of operations leading these firms to set up manufacturing unit in India
- Pricing still plays a significant factor for Indian consumers as 75 per cent of smartphones sold are below Rs 10,000