Why are Chinese mobile phone brands paying attention to the Indian market?

The Chinese mobile phone industry has been paying more attention to the Indian market this year. This is a choice that has to be made as the competition in the Chinese market is fierce, the penetration rate is already very high, the development potential is not great, and it is difficult to enter the European and American markets.

The growth of mobile phone users and sales in China will slow down. According to statistics from the Ministry of Industry and Information Technology, by the end of January this year, China's mobile phone users had reached 1.235 billion, close to China's total population, and the development of mobile phone users has reached a ceiling. According to IDC data, China sold 320 million smartphones in 2013. According to CCID, my country will sell 400 million smartphones this year, a year-on-year increase of 25%. The sales of 400 million smartphones is equivalent to one-third of 1.235 billion mobile phone users changing their phones every year. The potential for continued high-speed growth in China's mobile phone market is limited.

After several years of competition in the Chinese market, the competition landscape of mobile phone companies has basically taken shape. In the second quarter of 2014, the sales volume of smartphones in the Chinese market was 112.12 million units, of which Xiaomi's domestic sales volume was 15.1 million units, accounting for 13.5% of the market share, Lenovo's domestic sales volume was 13 million units, accounting for 11.6% of the market share, and Huawei's domestic sales volume was 11.86 million units, accounting for 10.6%, according to the data from the director of ISUPPLI China Research. The Chinese market is a fully competitive market, and it is difficult to widen the gap between the market shares of various brands. In the fourth quarter of 2013, Samsung had a 29.5% market share in the global market, but in the Chinese market, although it ranked first, its market share was only 19%.

If Chinese mobile phone companies want to win more sales, changing the competition landscape of domestic mobile phones and developing overseas has become an inevitable path. Currently, Huawei, ZTE, TCL and other Chinese companies are doing well in overseas markets. However, except for Huawei and TCL in the European market and ZTE in the US market, which have gained a certain market share, most mobile phone companies have achieved good development in the Asian, African and Latin American markets outside Europe and the United States. Interestingly, TCL ranks relatively low in the domestic mobile phone market, but it is one of the brands with the highest overseas sales among domestic brands, with nearly 80% of its mobile phone sales sold overseas; in the second quarter of this year, Huawei's overseas market sales accounted for 42.3%, Lenovo's was 17.7%, and Xiaomi's overseas sales accounted for less than 2%.

Brands such as Xiaomi, OPPO and VIVO, which have developed rapidly in the Chinese market in recent years, have chosen the markets of developing countries such as Southeast Asia and India as their main development direction, and India is undoubtedly one of their main markets. Just when Xiaomi was banned in the Indian market due to Ericsson's intellectual property lawsuit, Huawei announced that it would invest 10 million US dollars to consolidate the Indian market. This shows that domestic mobile phone brands value the Indian market.

The Indian market has great growth potential. India's population reached 1.21 billion in 2013, which is comparable to China's population. It is the world's second most populous country, so global mobile phone companies regard India as the next large mobile phone market comparable to China. According to an IDC research report, the sales volume of smartphones in India was only 16.2 million in 2012, and the sales volume of smartphones in 2013 was 44 million, an increase of nearly three times, making it one of the fastest growing markets in the world. In 2013, the total sales volume of mobile phones in the Indian market was 257 million, and the sales volume of smartphones accounted for too small a proportion. As the price gap between feature phones and smartphones narrows, the transition to smartphones will begin, similar to the situation in China a few years ago, which will lead to a reshuffle of mobile phone brands and provide opportunities for new mobile phone companies to enter.

The Indian market has many similar factors to the Chinese market, providing opportunities for the Chinese mobile phone industry. In the fourth quarter of 2013, Samsung ranked first with a 38% share of the Indian smartphone market, followed by two local Indian companies, Micromax with 16%, Karbonn with 10%, and Sony with 5%. This market structure is very similar to the Chinese market in 2013, where Samsung also occupied the largest market share. In more than a year, Chinese mobile phone companies have quickly defeated Samsung in the Chinese market. Chinese mobile phone companies may hope to repeat the story of defeating Samsung in the Indian market. In fact, Xiaomi seems to be repeating the story in China. In July this year, Xiaomi entered the Indian market and currently has a 1.5% share in the Indian market. It is a rapid progress.

India's consumption level is not high, and it focuses on cost-effective mobile phones. The US media said that although Chinese people are very sensitive to prices, they are still slightly inferior to Indians. It can be seen that Indians pursue cost-effectiveness more strongly than Chinese people. Indians always hope to buy more satisfactory products at reasonable prices. Micromax, a local mobile phone brand that has risen in the Indian market, has won the market by launching low-priced mobile phones. Its A62 smart phone is only 70 US dollars. It has achieved an annual shipment of 10 million units in just two years since its establishment, catching up with Samsung, the leader in the Indian smart phone market. Interestingly, the chips it uses come from Spreadtrum, a Chinese chip company.

Cost-effectiveness is the strength of Chinese mobile phone companies. Xiaomi's fastest-growing mobile phone in India is Redmi 1S, which is priced at about US$100. Although the price is higher than that of Micromax, its performance configuration is much higher. The first launch of Redmi 1S in India achieved an excellent result of 40,000 mobile phones sold out in 3.4 seconds; currently, the price of smart phones sold in the Chinese market has dropped to less than 200 yuan, and 4G smart phones have dropped to 308 yuan. As more Chinese mobile phone brands enter the Indian market, it is believed that Chinese mobile phone brands with high cost-effectiveness will be able to quickly expand the Indian market.

There are more than 900 million registered mobile phone users in India, but only 110 to 120 million people own smartphones. The broad market prospects have attracted Chinese mobile phone companies to enter. Chinese mobile phone brands that are good at price wars in the domestic market may find new development space in the Indian 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.