Can Indian Smartphone Brands Be Compared With Chinese Manufacturers?
The short answer to this question is no! But a look at the mobile phone leader board in 2015 would surprise you with that answer. Back in 2014-2015, Indian smartphone manufacturer Micromax came close to overtaking the-then market leader Samsung to become the number one smartphone company in India.
In fact, a closer look at the market during this time will reveal that not just Micromax, but most other Indian smartphone brands like Karbonn were doing relatively well. Another interesting fact is that most Chinese brands like Vivo, Xiaomi, Oppo and others were at their nascent stage during this time. So, why aren’t Indian smartphone companies doing well today, especially if you consider the strong head-start they have had?
Let’s look at some of the reasons how these Chinese smartphone brands overtook the Indian smartphone market.
Smart Marketing Strategies
When Chinese smartphone brands entered the Indian market, they didn’t wait to get a feel of how they would be received; they launched themselves with a bang! The Chinese smartphone market was, at the time, similar to the Indian market. This gave these brands greater insights into the kind of strategies that would work.
Packaging great value with affordability was a strategy that paid great dividends, and soon enough, you had a long line of eager customers. The Chinese worked on a “zero marketing” strategy, essentially letting the products speak for themselves. The savings from successful marketing campaigns were passed on to customers in the form of more affordable smartphones.
Global Centric Mindset
While Indian smartphone manufacturers were competing within the boundaries of the Indian market, the Chinese OEMs were competing at the world stage. If their smartphones were received well around the world, then there would be no reason why they wouldn’t be acceptable in India. This global mindset, coupled with a hunger for innovation quickly resulted in these brands becoming recognizable not only in India but all around the world.
Chinese smartphones today are not just looked upon as affordable devices; they are considered an innovation powerhouse. In recent times, the Chinese brands have outdone long-term market innovation leaders Apple and Samsung in some respects, like when comparing their budget 4GB RAM mobile. On the other hand, Indian smartphone manufacturers did not make any attempt to expand their R&D base.
What’s worse, they stuck to the old tried and tested manufacturing standards and marketing strategies. The lack of innovation on their part has resulted in Chinese manufacturers biting a huge chunk out of the Indian mobile market share.
Around the year 2015, when Indian smartphone manufacturers were doing very well in the country, most companies were operating at a 25%-30% profit margin. The huge profit margin meant that companies were increasingly trying to maximise profits by offering fewer features at the same price.
This strategy backfired the moment Chinese smartphones were launched in the market. Buyers felt ripped off for paying exorbitant prices for features that could be had at half the price. The Chinese brands, on the other hand, were focused on acquiring greater market share – even at the cost of lower profits. This strategy, as evident today, has worked well for the Chinese manufacturers.
Make in India
This next point seems rather paradoxical. Chinese manufacturers made the most of the reduced import tariff (currently at 5%) set by the government, and began assembling their phones domestically. This saw a reduction in their overall manufacturing and logistical costs. Eventually, this “make in India ” strategy worked wonders and resulted in a significant fall in competitive pricing.
Indian manufacturers, on the other hand, stuck to the traditional “made in China” manufacturing strategy. Although their finished products were cheaper in China, logistical costs and higher import duty on finished goods meant that the Indians missed the competitive pricing boat altogether.
4G and Reliance
The Indian cellular industry has seen a significant change in the last few years. 4G network, for instance, is available at an affordable price and is accessible to a majority of Indians. This easy availability of internet bandwidth meant that the public wanted 4G phones that were able to make the most of the available network. Unfortunately, Indian smartphone manufacturers were caught unaware, and were expecting widespread 4G access only by 2018. This meant that Chinese manufacturers could enter the 4G space and sweep out the competition with their latest mobile devices.
While the Indian smartphone brands had an outstanding opportunity up until 2015 to establish their dominance in the smartphone industry, they were unable to capitalize on the situation. Chinese brands, however, have been able to create their own opportunities, and were ruthless in taking over the smartphone industry in the country.