India is the new hot spot for China's smartphone makers

The number was as little as 1-2% about two years back

About a dozen Chinese handset brands, including Gionee, Lenovo, OPPO, Huawei, ZTE and Konka, have together taken a little more than 10 per cent of the Indian handset market in the past couple of years. The number was only one to two per cent about two years earlier.

These companies’ smartphones start from Rs 3,000 to premium ones costing up to Rs 40,000. Apart from the names mentioned, some more have begun the process to enter India, including Xiaomi, which has already eaten into the market share of Apple in the Chinese market. Xiaomi has hired Manu Kumar Jain, co-founder of e-commerce venture Jabong, to look after its India entry.

 As growth slows in China’s smartphone market, companies there are trying to increase their presence in markets such as India, Indonesia and Philippines, estimated to grow fast. India, the world’s third largest smartphone market, had the highest growth in this segment in the Asia Pacific. The year-on-year smartphone shipment growth was 186 per cent in the first quarter of 2014, says IDC. A little over 30 million smartphones are now sold yearly in India.

CHINESE IS CHEAP. SAYS WHO?

• Chinese handset brands have captured a little more than 10% of the Indian handset market
• These companies sell smartphones starting Rs 3,000 to premium ones costing up to Rs 40,000
• About 30 million smartphones are sold in India every year
• Samsung topped the Indian smartphone market with a 35% share, followed by Micromax (15%) , Karbonn (10%) Lava (6%) and Nokia (4%), according to IDC

Also, less than a tenth of India’s total mobile users have smartphones, and only about 17 per cent of mobile phones shipped into India last year were this variety. These Chinese  makers, some of which used to be vendors for Indian handset companies, are mainly competing with Indian handset makers such as Micromax, Karbonn, Lava, Intex and Max Mobiles. The latter companies have been trying to capture the entry to mid segment of the smartphone market, costing up to Rs 25,000.

“Over the next few quarters, these Chinese brands might actually eat into the shares of the Indian brands,” said an analyst with a market research firm in India.

 Beside the top eight Chinese brands which have already made their presence felt here, in India, another 45 — including Zopo, UMI, JiaYu, Mogu, Iocean and Meizu — are working to tap the smartphone market here, said a consultant working with a couple of these to facilitate their entry. The strategy is to flood the market with a lot of choice for consumers, including high-end hardware and good experience. They’ve all hired Bollywood stars to endorse their products, and the target segment is youth who spend at least a couple of hours on their handsets, using smart applications, beyond making calls and messages.

These apart, the main Chinese brands are focusing more on experience and after-sales service to pricing. “Price is not the key for smartphones. We’re trying to tell consumers that it is not about price but performance in terms of display and other features, which many handsets lack. After-sales service is another key area we are focusing on,” said Arvind Vohra, India Head, Gionee Smartphones.

“For OPPO, a fusion of technology and affection has always been the essence of our product design and development,”said Tom Lu, chief executive, OPPO Mobiles India. Steven Shi, the company’s general manager (marketing), said it would take time  to stand out as there have been perception issues about Chinese brands in India. OPPO entered India with its flagship product priced about Rs 40,000 and now sells smartphones for less than Rs 10,000. “Cheap is not the answer. Quality and service make the difference,”he added.

Most of the Chinese smartphone sellers sell 200,000-300,000 units a month across India on an average, in cities and semi-urban markets.

 Market analysts, however, said while Chinese smartphone makers will eat into the shares of the majors in in India, the latter’s dominance is unlikely to change soon.During the first quarter of 2014, South Korea’s Samsung topped the Indian smartphone market with a 35 per cent share, followed by home-grown Micromax with 15 per cent, Karbonn (10 per cent), Lava (six per cent) and Nokia (four per cent), according to IDC.