China’s Vivo, Xiaomi, Lenovo and Oppo dominate fast-growing smartphone market in India

PUBLISHED : Wednesday, 25 January, 2017, 10:52pm
UPDATED : Wednesday, 25 January, 2017, 10:59pm

The Chinese mobile phone juggernaut capped its rapid ascent in India last year by capturing close to a 50 per cent share of the world’s second-largest smartphone market in the fourth quarter.

Vivo, Xiaomi, Lenovo Group and Oppo Electronics dominated India’s top five ranking of smartphone suppliers in India in the quarter ended December 31, when total shipments of those devices in the country reached 28.1 million units, according to separate reports by Counterpoint and Canalys.

Samsung Electronics, however, remained the country’s largest smartphone supplier, the two research firms said.

“For the first time no Indian brand figured among the top five smartphone rankings,” said Karn Chauhan, a Counterpoint research analyst.

This development marked a significant payoff for Chinese smartphone suppliers’ bet to expand sales into India, as well as manufacture products there, amid the lingering weakness and tough competition in their home market.

All of the Chinese brands operating in India -- including Huawei Technologies, ZTE, Coolpad Group and Gionee -- combined for a 46 per cent market share last quarter, up from 14 per cent in the same period in 2015, according to Counterpoint’s estimates.

“In November last year, Chinese brands saw their [combined] share reach an all-time high, accounting for 51 per cent of the total smartphone market,” Chauhan said.

Indian smartphone brands saw their share of the market shrink to 20 per cent in the fourth quarter last year, down from 54 per cent a year earlier.

Canalys analyst Rushabh Doshi said local smartphone suppliers had been hit hard by the Indian government’s decision to demonetise the 500 and 1,000 Indian rupee banknotes.

The government pulled those banknotes from circulation in November last year, with the goal to clamp down on the country’s so-called parallel economy and counterfeit currency.

“Local brands’ target customers typically buy in cash and from independent retailers,” Doshi said. “With the short-term liquidity crunch caused by demonetisation, these retailers are suffering a slowdown in consumer spending. Local vendors are losing out, as retailers look to shift their stock to fast-moving, current devices.”

Major Indian brands Micromax, Intex and Lava saw their combined market share decline to around 11 per cent in the fourth quarter last year, compared with nearly 30 per cent in the same period in 2015, according to Canalys.

Counterpoint’s Chauhan said demonetisation had an impact on the Indian smartphone brands last year, but so did sharp competition from Chinese suppliers.

“It would be unfair to take credit [away] from Chinese players that continue to expand their presence throughout India,” Chauhan said.

Huawei, Xiaomi and Lenovo are among the large Chinese brands to have set up smartphone production facilities and distribution networks in India, a market estimated to have more than 300 million smartphone users at the end of December.