Today we are overly dependent on china for our smart phone requirements, and Chinese companies like, Xiomi,Realme, Vivo, Oppo, have around 72 percent market share in the indian smart phone market which is valued at 2 lakh crores.
Despite the boycott calls for Chinese products , smartphone sales have not been much affected for the Chinese firms, Main reasons for this is lack of alternatives at that price point in India which offer similar quality and features.
Chinese Firms have also changed their strategy, amid these boycott calls and have decided to curb their promotions and have withdrawn their ads for a few days, till this anti china sentiment in the market withers down. Chinese smart phone makers have also tweaked their strategy and they are projecting them selves as Indian brands so that their sale is not affected.
Realme for example is projecting itself as an Indian startup, while the fact is that it is a brand controlled by BBK electronics of China.
Made in India would be more prominently displayed on Chinese smartphones in the future. Reason being all Chinese companies have set up factories in India where these phones are being assembled. And they are assembling their phones in India because by setting up factories here under make in India program, Companies save lot of money which they would otherwise pay in tax if they import the finished product. So to take advantage of it they have found a way around it, now they import components of the phone from china and assemble those components to make a finished product in their Indian factory.
For information , each mobile consists of 300 or more components and subcomponents, so technically i do not agree with the made in India tag on these smart phones as they are mostly being assembled here with all important parts coming from china and this is done to take advantage of the tax laws of land. Their is no research and development of new technology being done in the country making us more and more dependent on china.
But where are our Indian companies among all this? To answer this we have a few indian brands like Micromax, Lava, Intex, Karbon etc. and they had a good market share before the advent of Chinese manufacturers. But the problem with Indian brands was they were mostly businessman and they did not invest in Research and Development.
They had also set up their assembly units in India with most of the parts being imported from China,Micromax which was once the biggest Indian mobile company was only a rebranding company, that is importing Chinese phones and than putting their brand and label on it. So Indian companies were mostly dependent on China for their phones, hence when Chinese companies themselves came and set up their plants here ,after the MAKE IN INDIA program was launched, they brought the latest technology and features in their smart phones, and they offered them at a price point that Indian companies could not compete with them and lost their market to these Chinese companies very quickly.
As a result ,the Indian companies still have some sizable presence in the feature phone market (around 14.4%), but their presence in the smart phone segment is too little, that too is shrinking by the day.
From zero in 2014 how chinese smart phone brands reached this stage that they control around 3/4th of the indian market today ?
They launched their smartphones in the Indian market after carefully studying the consumer behaviour here.Keeping the price conscious Indian consumer in mind they launched their feature packed phones at great price points, which undercut the competition and helped them gain market share very rapidly in the Indian market.
Great marketing by Chinese companies is another factor for their dominance, they are sponsoring all major events take for example IPL, now only a 4 year old company OPPO is the title sponsor of IPL in india , grabbing a large no. of eyeballs and publicity in bargain, Its because of this great marketing that you find their boards everywhere in India.
you might have wondered why is it so, that whenever you go to any market you see, oppo, vivo boards everywhere, all mobile shops they are prominently displayed. Well the simple reason is shops are being paid handsomely for doing their advertisement.
I should write here about a recent incident which happened when we went to buy a mobile to the biggest shop in town, we wanted to buy a non Chinese product and with no Indian option available we had thought to buy a handset of Korean brand Samsung.
But to my surprise, shopkeeper was insisting on selling an Oppo phone to us, though he had samsung phones available in stock, he kept insisting oppo phones offer better features and are cheaper. When we told him clearly that we dont want any chinese company product than he tried to convince us by saying that all electronics in india are chinese, some more and some less.But finally when we didn’t cede to his pursuasion and We made it clear that we don,t want Oppo, then he said”ok as you wish ” then he called a salesman to show us some Samsung mobiles
But I realised one thing that this is how these brands are increasing their market share so rapidly, when i did some research on it i found that Chinese brands pay highest margins to retailers and also addnl incentives are given to them when they fulfil some targets. So indian shopkeepers all over want to sell these phone as they are earning much more by selling them.
Chinese brands, continuously updating their technology and software thereby launching new models every month is another factor which goes in their favour.
Indian brands could not compete because they were mostly small businesses which did not have the resources and time to do Research and development in India, Chinese companies have these resources as well as technical know how to continuously upgrade their products and bring the latest products to india.
In the present situation their are not many options before the consumers to replace their Chinese phones,specially in the lower end segment, hence the Chinese brands like xiomi ,oppo,vivo, Realme,oneplus,huawei, IQoo etc continue to dominate the Indian market.
Now let us talk a little about non chinese brands options before the consumers-
Talking about Indian brands first – Indian brands like Micromax, Lava, Intex, karbon, are planning to make a comeback in the indian smartphone market amid the rising anti china sentiment. we can only hope that this time they try to develop smartphone components locally and are not dependent on China for their requirements. Also we can only hope that bigger Indian businesses like Reliance and Tata also enter this smartphone business , as they have the resources for R & D , and potential to compete with Chinese firms, also the lucrative growing market of smartphones valued at arnd 2 lakh crores should not be left only for the foreign companies to benefit.
Samsung – is the only non chinese brand in the top 5 smartphone companies today, It is also manufacturing in india with their largest manufacturing plant of the world in Noida. Another good thing about this Korean giant is it is manufacturing most of the components also by itself and not dependent on China, It has wide range of smartphones, specially in the mid and high range.
Samsung stands to gain if consumers switch their loyalties driven by anti china sentiment.
Apple – is an american brand, and choice of most elite in the high end segment of smartphones. But the problem with apple I phones is that most of the phones(more than 90 percent) are manufactured in China. Parts of the phone come from US, China, Taiwan, Korea, Japan,Malaysia etc but their major manufacturing and assembling is done in china.
Nokia is a Finland company, but most of its components and smartphones are manufactured in China
LG is another Korean brand with some manufacturing in India and some in korea.
Asus is an Taiwanese brand manufacturing in Taiwan and India.
Sony is another major Japanese electronics brand, they have manufacturing facilities at many places including japan, India and China.
Besides this their are some other options like HTC (Taiwan), Toshiba,Panasonic(Japanese), Microsoft(USA) and some other Less popular brands but many of them are manufacturing in China.
In this interconnected world , while it is difficult to keep China totally out, from our smartphone purchases, because some components may be china made even in Non Chinese Companies, but we can try the best we can by selecting those with minimum Chinese Exposure. Also we can hope that sometime in future we dont have to depend on these foreign players for our smartphone requirements and we have our own smartphone fully developed and manufactured in India
Boycotting Chinese smart phones is the least that we can do for our country, to show our support to our soldiers in these challenging times.
Thank You
Bhaskar Sankhla
Disclaimer – views expressed are author,s own.
Bhaskar sankhla 