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Indian consumers spent over $6.8 billion on Chinese smartphones in fiscal year 2018

Indian consumers spent over $6.8 billion on Chinese smartphones in fiscal year 2018

Consumers in the country spent the amount on purchases smartphones made by only the top four Chinese brands, which was nearly twice what they spent on the previous fiscal year

According to analysts and industry executives, this trend is set to continue with Chinese brands dominating the Indian smartphone market.

The big four — Xiaomi, Oppo, VivoNSE 0.00 % and Honor — along with a few other Chinese brands like Lenovo-Motorola, One-Plus and Infinix, make up more than 50% of the total Indian smartphone market by sales. Analysts reported that data indicated that sales of Chinese brands were growing rapidly this year as well.

The Chinese brands are launching high-specification models at lower prices than South Korean and Japanese companies—which falls directly in line with Indian consumer’s preference for products made by multinationals.

Counterpoint Research associate director Tarun Pathak also credited the easy access top Chinese brands have to the Shenzen hardware, R&D hub and the supply chain ecosystem.

“This has helped them to be innovators and to be always on top of trends,” he stated. 

India stands to gain with Xiaomi, Oppo, Lenovo-Motorola, Huawei and Vivo investing in local manufacturing and creating jobs, thanks to Make in India policies. Xiaomi had announced plans to invest $2bn in smartphone component  manufacturing in April. Oppo is also establishing two new manufacturing facilities in the country.

Vivo employs more than 5,000 employees people in its plant. The chief of one of the largest cellphone retail chains said the Chinese brands have established themselves in key price segments — Xiaomi in the $81-$177 segment, and  Oppo and Vivo in the $136-$299 one. Honor on the other hand, is gaining share in the $109-$163 segment. 

“These price segments account for more than 80% of the overall market where no Indian brands have managed to cut the ice and Samsung is the sole non-Chinese brand to fight it out,” Pathak further stated.

The combined sales of these four Chinese smartphone makers in FY18 almost doubled to $7bn from Rs $3.5bn in FY17, despite already being on a higher base. While Xiaomi and Huawei have been profitable in the Indian market, Oppo and Vivo are yet to break even.

 As per Hong Kong-based Counterpoint Research, the Indian smartphone market was valued at around $20 bn in FY18. The smartphone market is growing at a rate of about 10-11%, it also said. 

A Huawei India spokesperson stated that its Honor smartphone brand with its India-first approach had registered unprecedented growth of 281% in the first half of 2018 and was among the top two brands in the online segment in the April-June period on the back of several new launches across price segments. 

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