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Resurgence of Chinese Smartphone Brands in India: A Complex Landscape

InduQin

In the March quarter, Chinese smartphone brands such as Xiaomi, Vivo, Oppo, Realme, Transsion, and Motorola have seen their combined market share rise to 75%, despite facing increased government oversight. This growth is attributed to a rebound in shipments by top brands like Xiaomi and Vivo, after experiencing a few slower quarters in 2023 due to low demand and supply chain disruptions. Additionally, smaller brands like Motorola and Transsion have also expanded their presence in the market.



The Indian smartphone market has witnessed a resurgence in the performance of Chinese brands, following a period of decline in 2023. Despite ongoing government scrutiny, these brands have managed to regain their stronghold, driven by a combination of strategic adjustments and consumer loyalty.

 

According to Counterpoint Research, the cumulative market share of Chinese smartphone brands, including Xiaomi, Vivo, Oppo, Realme, Transsion, and Motorola, rose to 75% in the March quarter of 2024. This represents a significant recovery from the low of 61% recorded in the July-September period of 2023, which was attributed to low demand and inventory bottlenecks.

 

The rebound can be largely attributed to the improved performance of the top brands, such as Xiaomi and Vivo, as well as the expansion of smaller players like Motorola and Transsion. This resurgence has brought the market share of Chinese brands closer to their peak of 77% achieved in the first quarter of 2020, before geopolitical tensions disrupted their operations.

 

Interestingly, the government scrutiny and investigations on these Chinese brands have had little impact on consumer sentiment. Customers have remained largely indifferent, opting for the value-for-money offerings provided by these brands.

 

Chinese smartphone brands have maintained a strong foothold in the value-for-money segment, with their market share hovering around 70% in the ₹7,000-25,000 price range. However, their presence in the sub-₹7,000 segment has declined from 22% in the first quarter of 2020 to just 5% in the first quarter of 2024.

 

The real story lies in the premium segment, where Chinese brands have been steadily gaining ground. Their cumulative share in the ₹25,000-50,000 price range has increased from 2% in the first quarter of 2020 to 18% in the first quarter of 2024. This indicates a strategic shift by these brands to cater to the growing demand for premium smartphones in the Indian market.

 

Xiaomi, in particular, has shown a strong resurgence, with a 28% year-on-year growth in shipments in the March quarter. This can be attributed to the brand's leaner and more streamlined portfolio, as well as its proactive offline channel strategy.

 

Similarly, Motorola saw a 58% year-on-year surge in shipments, driven by the demand for its attractive designs and the smooth Android experience it offers. Transsion brands, such as Infinix, Tecno, and Itel, also experienced a 28% year-on-year growth, thanks to their increased focus on offline channels and the introduction of premium hardware in the affordable segment.

 

However, the overall revenue share of Chinese handset brands has declined from 70% in the first quarter of 2020 to 48% in the first quarter of 2024. This can be attributed to the strengthening premiumization trend in the Indian smartphone market, where brands like Apple and Samsung have gained ground.


"The post-pandemic era has witnessed a surge in demand for premium smartphones in India, prompting Chinese OEMs to adapt their strategies," said Prabhu Ram, head of the industry intelligence group at CMR. "Previously focused on capturing the affordable and value-for-money smartphone segment, these OEMs are now increasingly venturing into the premium end."

 

While the revenue base has widened since 2020, the inability of Chinese brands to fully capitalize on the premium segment has resulted in a fall in their overall revenue share. Brands like OnePlus, which were once leaders in the premium space, have seen their share decline due to a dilution of their portfolio with mid-range and budget offerings.

 

The Indian smartphone market remains a complex landscape, where Chinese brands continue to navigate regulatory challenges and evolving consumer preferences. As the battle for market share and revenue intensifies, these brands will need to strike a delicate balance between maintaining their value-for-money proposition and successfully capturing the growing premium segment.

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