Attacking India: Why domestic mobile phones are unable to defeat local giants

Attacking India: Why domestic mobile phones are unable to defeat local giants

Since last year, as the domestic mobile phone market has gradually become saturated, many Chinese mobile phone brand manufacturers such as Meizu, Coolpad, Lenovo, OPPO, Xiaomi, Huawei, Gionee and vivo have almost all made India their first choice for overseas expansion. The reason is simple: India's market potential is self-evident, with a dense population, an upward economy, an imperfect patent supervision system, and a low smartphone penetration rate (less than 30%). Almost everyone believes that India's smartphone market will explode in the next few years, and there is almost no doubt that shipments will double. There is also almost no doubt that India will grow into the world's largest smartphone market after China. This is an important reason why domestic manufacturers have all made India their first choice for overseas expansion.

Indian national brand Micromax is more cost-effective than domestic mobile phone manufacturers

At present, the manufacturer with the highest market share in India is neither Samsung nor a domestic manufacturer, but an Indian manufacturer. In India, Samsung was still the top mobile phone manufacturer in terms of market share last year, but this year it has been surpassed by Micromax, the largest Indian smartphone manufacturer. Micromax's market share in India has exceeded 22%, followed by Samsung, while Intex and Lava, two Indian manufacturers, ranked third and fourth with 9.4% and 5.4% of the smartphone market share respectively.

Domestic manufacturers have been competing against each other in the Indian market for a while, but they have found that the Indian market is a tough nut to crack. In fact, we have finally discovered that the opponents faced by domestic manufacturers are not Samsung or domestic competitors, but Indian local brands such as Micromax, which also started with cost-effectiveness.

China Cool Alliance and Xiaomi have been immersed in the low-end market for a long time. In just a few years, they have almost completely eroded the domestic low-end market of Samsung, HTC and other brands. It stands to reason that from last year to this year, domestic manufacturers should have been doing well in the Indian market, but in fact, as of now, mainstream domestic manufacturers have not been able to stand out in the Indian market, and even Samsung, which has been working in India for a long time, has been squeezed out of the top spot. In terms of cost-effectiveness strategy, domestic manufacturers have encountered strong sniping from strong local Indian rivals.

Micromax has a better understanding of Indian policies, markets and user needs

From the perspective of core advantages and technology, Micromax is far from having the hard power to beat Samsung and domestic manufacturers. Because Micromax does not have the ability to control the industrial chain like Samsung and other manufacturers, it mainly adopts the OEM model, and almost all of its products come from Shenzhen foundries. It also does not have the ability to develop chips, and its chip supplier is China's Spreadtrum Communications. Its biggest advantage and selling point lies in its cheapness and cost-effectiveness. It is understood that Micromax's low-priced mobile phones of US$70 are sweeping the entire Indian market, such as its best-selling model A62 smartphone, which is popular in India.

But what’s important is that Micromax understands Indian policies, markets and users’ subtle needs better than domestic manufacturers.

Micromax, the local leader in the Indian mobile phone market, started out as a supplier of Nokia, providing low-priced mobile phones unique to India. The smartphones sold by this manufacturer are basically below US$70, and its high-end flagship models are basically below US$150-200, and sales are hot. In terms of price, domestic mobile phones priced at 1,000 yuan are not advantageous. The current situation is that competition in the Indian low-end mobile phone market is more brutal, and there is no lowest price, only lower prices. Under this situation, domestic best-selling mid-to-high-end models such as Huawei Honor 6plus, Mate 7, and Xiaomi 4 have basically lost their cost-effectiveness advantage in India compared with the price of Micromax's flagship phones.

On the other hand, the current market situation in India is equivalent to the stage of popularization of domestic smartphones, with feature phones still the mainstream and smartphones developing rapidly. The mainstream network in India is 2G, and 3G is not yet popular, with a penetration rate of less than 10%, while domestic thousand-yuan phones basically support 4G networks. Therefore, the cost-effectiveness and the so-called Internet service ecosystem have basically failed under the current situation of India's 2G network.

In addition, local Indian manufacturers understand the national conditions and needs better. One of the national conditions of India is that it has a large population and a noisy public environment, and Micromax's mobile phones often improve the sound quality to match the noisy environment in India. Indian women prefer jewelry, so Micromax embeds mirrors and jewelry in the body to target female customers. In addition, the reason why Micromax is more attractive than domestic mobile phones is that it understands the national conditions better and has more advantages in localized languages ​​and services. For example, Micromax has launched a variety of local language service telephones and launched smartphones that support more than 20 Indian dialects.

Offline retail channels are the collective weakness of domestic manufacturers. Indian local manufacturers have deeper roots

On the other hand, domestic mobile phones face shortcomings in offline retail channels. India has a low Internet penetration rate and online channels account for a very small proportion. For Xiaomi, online sales can directly save 30% of the cost of a mobile phone, but in India, this advantage of domestic mobile phones disappears again. Because even if some users can be captured through online channels, if they are copied to India, they will first face legal and policy difficulties in India.

According to relevant information, India has a policy on foreign direct investment in e-commerce, that is, if a foreign company listed abroad wants to develop e-commerce in India, it must support India with 26% of its equity within a five-year period, and the field it enters must be B2B e-commerce. So at present, Xiaomi and other manufacturers have more cooperative strategies, for example, Xiaomi wants to use India's largest online store - Flipkart Internet Pvt. OPPO uses the platform of Amazon India.

But at the same time, offline retail channels are firmly controlled by local Indian manufacturers. It is understood that more than 1.1 billion people in India live in rural areas or towns outside of large cities. The Internet penetration rate in these areas is extremely low, and it is difficult to cover these mainstream user markets through Internet channels. Therefore, a decentralized offline retail channel network is indispensable. As one of India's leading domestic mobile phone brands, Karbonn already has more than 80,000 retail outlets in India. Micromax's offline retail channels are also quite complete.

Therefore, if domestic mainstream mobile phones want to enter India, they must first build offline retail network channels. Therefore, Xiaomi, which is good at online marketing, announced that it will increase its capital investment in the Indian market, open Indian factories, and open physical stores. However, the laying of offline retail channels needs to be rooted in India, which also requires time and huge offline human and financial costs to complete. For manufacturers who are eager to make quick money from the demographic dividend of the Indian market, it is not easy to take root in the local area. Because from another perspective, India's business environment is not conducive to domestic manufacturers competing with local manufacturers in India for offline retail channels and markets.

India supports its domestic manufacturing industry to resolve employment crisis, policy dividends are turning to local mobile phone manufacturers

We know that although India's economy is constantly developing, employment has always been the top priority of the Indian government for a poor country with a rapidly growing population. This has led to the government's efforts to protect its own brands. According to data, the Indian government used to like to retroactively tax foreign international companies that made money. For example, after the Indian government changed the new law, it retroactively taxed many international companies. In fact, this reflects India's protection of national brands on the one hand, but also reflects its poor investment and business environment. Data disclosed by the industry show that India has ranked below 140 in the international business environment ranking, and its business environment is not even as good as Iran.

The mobile phone manufacturing industry is part of the Indian government's strategy to develop a strong manufacturing country under the national conditions. Last September, the Modi government of India put forward the slogan of "Make in India" with great fanfare. Building a world manufacturing center is India's future strategic goal based on the current national conditions.

Therefore, although India welcomes large foreign companies to set up factories in India, it does not welcome companies that only open retail stores or sell products through e-commerce channels without supporting Indian manufacturing, because the starting point of the Indian government's attitude towards foreign companies is to hope that foreign companies coming to India can drive local employment and the prosperity of the manufacturing industry.

Therefore, we can see that Apple, which has no factories in India, has almost no retail stores in India. It is said that this is closely related to the government's attitude towards manufacturing. Gionee's offline retail stores in India have also gradually developed on the basis of its development of foundries. Therefore, Xiaomi, which has no offline channel advantages and experience, has also expressed its intention to open factories and physical stores in India. BBK also plans to open a factory in India this year, and has negotiated with the Indian government and obtained approval. Therefore, domestic mobile phone production in India may need to rely heavily on its own factories to solve production capacity.

Indian domestic trade protectionism: a deep crisis for domestic manufacturers in the future

All this reflects the Indian government's choice of trade protectionism based on its local national conditions.

At present, the Indian rupee is depreciating. In order to stimulate the local economy, the Indian government must support the local mobile phone manufacturing supply chain. At the same time, it also sees the huge potential of the local smart phone market. In order to weaken domestic economic contradictions, India is also strategically raising import taxes on electronic products such as smart phones, accelerating the development of Indian mobile phone manufacturers' ability to assemble, research and develop, and manufacture smart phones. Micromax has also gradually grown into India's largest mobile phone manufacturer under the government's policy stimulation and support. Micromax also carries the expectation of Indian mobile phone brands to impact the international market. Its founder often publicly expresses his desire to save the Indian economy, respond to Prime Minister Modi's vision and policies, and develop India's mobile phone manufacturing industry, which reflects his ability to incite national sentiment. Therefore, Micromax has great advantages in local policy protection and Indian national emotional recognition under the national conditions of India. This is a deep crisis for domestic mobile phone manufacturers to develop in India in the future.

Therefore, we can see that, in fact, the favorable time, location and local conditions of India are not conducive to the rise of domestic mobile phones in India. To capture the Indian market, domestic mobile phone manufacturers need to study India's national conditions, policies and subtle user psychological needs, deepen offline channels and seek localized cooperation on this basis. If they always hold the idea of ​​challenging and defeating Indian local manufacturers to take the top spot in the Indian mobile phone market, it may lead to a collective "acclimatization" failure of domestic mobile phones in the subsequent process of docking with the Indian local market due to misunderstanding of policies and Indian national conditions.

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.

<<:  Uncovering the secrets of Samsung’s empire: more than just selling phones

>>:  How did Nokia, which was ruined by the Americans, rise from the ashes?

Recommend

In fact, the Xiaomi bracelet can be sold for 49 yuan

Selling for only 79 yuan, the impact of the Xiaomi...

Analysis of B Station’s advertising promotion!

Nowadays, content marketing has become an indispe...

Strategies to improve user retention

I have written an article in my previous diary ca...

What will the weather be like tomorrow? AI predicts

The Earth we live on is experiencing one of the h...

4 common user growth solutions

Designing solutions based on the problems reflect...

Why are you not good at marketing?

Erya told me today that she has registered accoun...

Look! Here is a group of "sponge sheep" that can photosynthesize

When exploring the world of marine life, most peo...

How to use user tags to improve activity conversion rate?

In the field of operations , tags are usually a t...