Chi­nese phones mute In­dian brands

The Times of India (New Delhi edition) - - TIMES GLOBAL - Pankaj.Do­[email protected] In­dian brands in­clude Mi­cro­max, Kar­bonn, Lava and In­tex, while the Chi­nese com­pa­nies have brands such as Xiaomi, Vivo, Oppo and OnePlus. Overall, the smart­phone mar­ket size is seen at around 140 mil­lion in 2018, ac­cord­ing to es­ti­mates

New Delhi: Once pop­u­lar across smart­phone users, home­grown In­dian com­pa­nies have lost out in the race to Chi­nese brands, which to­day ac­count for six out of ev­ery 10 de­vices sold in the coun­try. In­dian brands such as Mi­cro­max, Kar­bonn, Lava and In­tex — which used to lord over the bur­geon­ing smart­phone mar­ket till just four years ago — are just a pale shadow of their dom­i­nant self, fin­ish­ing 2018 with a sin­gle-digit share against 43% recorded in 2015.

Chi­nese brands such as Xiaomi, OnePlus have been wit­ness­ing mas­sive growth as they in­tro­duced new mod­els, packed them with lat­est fea­tures, and backed it up with ag­gres­sive pric­ing. Hav­ing har­nessed the on­line sales chan­nels through an in­tel­li­gent ‘flash sales’ mode to cre­ate a buzz around their highly af­ford­able de­vices, the com­pa­nies have now started to tar­get the off­line — or brick-and-mor­tar — mar­ket through ‘Made in In­dia’ de­vices, even un­set­tling Korean be­he­moth Sam­sung from the top po­si­tion in the process.

The ex­cep­tion to this sorry state of af­fairs of In­dian brands has been Re­liance Jio, but only in fea­tures phones, which are mostly bun­dled with its mo­bile tele­com ser­vices. Jio dom­i­nates fea­ture phones mar­ket with a share of nearly 40%. Sec­ond-ranked Sam­sung is es­ti­mated to have a share of 12%.

So, what led to this fall of In­dian brands? “The Chi­nese brands had been very ag­gres­sive from the very be­gin­ning. They were very strong when the tran­si­tion from 3G to 4G de­vices was hap­pen­ing,” says Tarun Pathak, as­so­ciate di­rec­tor at Coun­ter­point Re­search. “In­dian brands — such as Mi­cro­max — were busy clear­ing large pile-up of 3G in­ven­tory, which was clearly out­dated.”

Also, In­dian brands failed to read larger con­sumer trends. As Chi­nese com­pa­nies ex­panded their port­fo­lio and brought in new fea­tures, In­dian com­pa­nies were slow to re­act, lag­ging in in­tro­duc­ing fea­tures such as 4G, dual cam­era, fin­ger-print sen­sor, or glass-back. For ex­am­ple, Coun­ter­point es­ti­mates that glass-back — which gives a pre­mium feel to de­vices — is al­ready on 26% of smart­phones, and is ex­pected to have a 60% share by end-2020.

The Chi­nese com­pa­nies’ de­ci­sion to ini­tially tar­get the on­line model re­ally worked in terms of keep­ing costs un­der check and reaching buy­ers faster. Also, their fo­cus on high­pitched mar­ket­ing and ad­ver- tis­ing cam­paigns — even an ex­pen­sive cricket spon­sor­ship — helped them gain vis­i­bil­ity very fast. “In­dian com­pa­nies were not in touch with re­al­ity, and had lost fo­cus,” says Mo­han Shukla, a tele­com in­dus­try vet­eran and CEO of con­sult­ing firm FinXPros.

Ac­cord­ing to Ashok Gupta, whose com­pany Op­tiemus had an In­dian phone brand Zen, the Chi­nese have “lit­er­ally killed” lo­cal brands. “Our home­grown in­dus­try stands nowhere… Sell­ing smart­phones means suf­fer­ing losses,” says Gupta. “Ear­lier it was en­try time for peo­ple in smart­phone, now it’s time to exit. I am not pes­simistic, but if I face cer­tain death, then I will save my­self,” says Gupta, whose com­pany now does con­tract-man­u­fac­tur­ing for other brands, apart from mak­ing Black­berry phones.

It is time to have “cham­pion In­dian brands” to counter the trend, says Pankaj Mo­hin­droo, chair­man of In­dia Cel­lu­lar and Elec­tron­ics As­so­ci­a­tion. “We have sought a spe­cial dis­pen­sa­tion from the gov­ern­ment for cre­at­ing global In­dian com­pa­nies. It is the need of the hour. Fight­ing Chi­nese brands is like fight­ing a na­tion.”

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