Why can domestic mobile phones occupy nearly half of the market share in India?

Not long ago, according to overseas media reports, in October this year, Chinese smartphone manufacturers gained 40% of the market share in the top 30 cities in India. At present, although Samsung still holds the top position in the Indian smartphone market, domestic manufacturers continue to erode the offline and online markets. In comparison, Indian local manufacturers have been left far behind by domestic mobile phone manufacturers and are in a more passive situation.

In addition, according to relevant statistics, the Indian market as a whole is showing a continuous upward trend. As of the September quarter of this year, the market in India's top 30 cities has increased by 20.4% month-on-month, among which the second- and third-tier cities have increased by 23.3% month-on-month. According to a senior analyst at market research firm IDC, Chinese manufacturers are the main contributors to the growth of India's offline retail market and continue to monopolize online channels. This shows that Chinese smartphone manufacturers have made a considerable contribution to the growth of India's smartphone market. So why are there so many domestic mobile phone manufacturers in the Indian market?

Why are Chinese smartphone manufacturers rushing to enter the Indian market?

According to data released by IDC as of October 2015, the penetration rate of smartphones in the Indian market is only about 10%, and from the perspective of economic consumption structure, India is the country closest to China. According to consulting firm Zinnov, the growth rate of smartphones in India will remain at around 36% in the next five years. According to a media report, walking on the streets of India, you can even find feature phones being sold on the roadside. The huge potential market dividend has become a "fat piece of meat" in the eyes of mobile phone manufacturers outside India. As competition in the Chinese smartphone market intensifies, domestic mobile phone manufacturers have gone abroad to look for new business opportunities.

In addition, compared with the "patent barriers" in developed countries, the threshold of developing countries is lower, which is an obvious opportunity for domestic mobile phone manufacturers who started late. Without strict supervision, it also provides an excellent environment for the penetration of domestic mobile phones. At the same time, domestic mobile phones have been known for their cost-effectiveness in the mid- and low-end markets in recent years, which is very attractive to Indian consumers. According to statistics from research companies, in the Indian market, models with a price range of 4,000-8,000 rupees (approximately 400-800 yuan) account for about 70% of the market share. In this range, it is the main battlefield for domestic mobile phone brands with high cost-effectiveness.

Will domestic manufacturers face challenges from local manufacturers in the future?

At present, domestic mobile phone brands are growing rapidly in the Indian market, while local mobile phone manufacturers are being suppressed. However, if the capabilities of local Indian mobile phone companies are improved in the future, it is possible that domestic manufacturers will face challenges from Indian smartphone manufacturers. However, this situation is unlikely to happen in the short term. According to IDC data, in October this year, Micromax's market share was 6.8%, a monthly decline of 16.7%. In the smartphone market below $100, Micromax encountered pressure from other local Indian sellers, and in the smartphone market below $150, it faced pressure from Chinese sellers.

It can be seen that in addition to competing with overseas smartphone brands, local smartphone manufacturers in India also have to compete with each other. In such an environment, the advantages of local smartphone manufacturers in India are not very obvious. Samsung and Apple control the high-end market, while Chinese smartphone manufacturers have seized most of the market share from the mid-to-high-end to the mid-to-low-end market. However, domestic mobile phone manufacturers should be careful not to excessively entangle with Indian mobile phone manufacturers in the mid-to-low-end market. Only by enhancing brand influence and continuously penetrating into the mid-to-high-end market can they achieve long-term development. Whether domestic mobile phones can remain invincible in the future depends on whether they can gain a firm foothold in the mid-to-high-end market.

Domestic mobile phone manufacturers will intensify their efforts to expand overseas markets

Next year, the competition in the domestic smartphone market will remain fierce. According to industry insiders, "the growth of smartphones in 2016 mainly came from third- and fourth-tier cities and towns. However, the speed at which Internet mobile phone brands are sinking into rural areas is accelerating, and the sinking of Internet mobile phone brands will break the information asymmetry." Indeed, this year, Internet mobile phone manufacturers including Xiaomi, Honor, and Meizu have been constantly testing the offline market. Next year, more manufacturers will flock to the third- and fourth-tier city markets, and the already bloated offline market will become even more lively. Therefore, for domestic mobile phone manufacturers, compared with the harsh domestic competition environment, it is better to explore new opportunities in the overseas market.

In addition, the rising dollar price has led to higher mobile phone costs, and many manufacturers have begun to complain about the excessive pressure. However, some domestic manufacturers that have already laid out the global market in the early years said that the impact was not too great, which further strengthened the driving force for more mobile phone manufacturers to seek market opportunities in overseas markets. Not long ago, the head of OPPO's Taiwan market revealed to the media that OPPO plans to enter the US market. Therefore, domestic mobile phone manufacturers should really consider whether to seize the time to expand overseas markets to avoid the domestic mobile phone market environment being still very bad next year. It is better to open up more overseas markets, which can not only continue to drive terminal sales, but also enhance the brand's influence in the international market.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.