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Chinese phones mute Indian brands

Indian brands which used to lord over the burgeoning smartphone market till just four years ago - are just a pale shadow of their dominant self.

, TNN|
Feb 11, 2019, 10.51 AM IST
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 "Indian brands - such as Micromax - were busy clearing large pile-up of 3G inventory, which was clearly outdated."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 advertising 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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