Make in India’s efforts to localise production of smartphones to the Indian soil has made no dent in the dominance of Chinese smartphones in the Indian market.
Data from Counterpoint Research revealed that market share breakup for smartphones sold by Chinese brands, Indian brands and global brands have largely remained the same in the last five years.
This is after several efforts have been made by the government in the intermittent period to force out Chinese players from the market. These efforts include the Production Linked Incentive (PLI) scheme that was conceptualised in 2020 and largely excluded Chinese brands like OnePlus, Vivo, Realme from claiming the subsidy – as well as several actions by the Enforcement Directorate over the years which have targeted firms like Xiaomi for illegally funnelling income from India back to China.
Price conscious Indian consumers have always had a good appetite for cheap Chinese smartphones with state of the art specs. Therefore it is no surprise that the majority of Indian customers continue to buy Chinese brands. However the government’s efforts to make a dent on the prevalence of Chinese brands has been to no avail.
According to the Counterpoint data – between 2019 and 2023, market share of sales for Chinese brand smartphones only increased from 72 per cent to 74 per cent. The most recent data for smartphone sales for Q1FY24 also puts market share for Chinese brands at 75 per cent.
What is more revealing from the Counterpoint data is the fact that market share of sales by global brands has not budged at all in the last five years. India launched the PLI for mobile manufacturing in 2020, which is in its third year of implementation. The mobile PLI was also the first of the 22 PLI schemes that the government has launched since then. Global brands like Apple and Samsung have been the largest claimants for subsidies under the scheme and some of its largest success stories. Analysts predict that Apple will produce a quarter of its iPhones in India by the end of this year.
Apple is also achieving record sales revenues in India every year, CEO Tim Cook highlighted strong double digit growth in iPhone sales in India for the January-March quarter. Despite these numbers, the breakup by market share of sales by global brands has largely remained stagnant in the last five years, going from 27 per cent in 2019 to 25 per cent in 2023.
Indian brands like Lava Mobiles that have also been beneficiaries under the scheme have made no headway in improving their sales, market share has gone down from 2 per cent in 2019 to 1 per cent in 2023. Even as telecom operators like Jio partner with Indian phone makers to make cheap indigenous phones – those have found limited takers.
Shubham Singh, Research Analyst at Counterpoint Technology Market Research told businessline that major Chinese brands have in fact seen a minor decline in sales in India. However, the newest Chinese entrant into the market Transsion has balanced the scales overall. Transsion is the fifth largest smartphone company globally by sales, and after dominating the affordable smartphone segment in Africa, Pakistan and Bangladesh, it has set its sights on India. According to a report by Rest of the World, Transsion sells affordable smartphones under the brands Tecno, Itel and Infinix brands. These phones have state of the art specs at a throwaway price, some of its Itel phones are iPhone lookalikes.
Singh explained, “Transsion has been doing really great in India market by offering higher specs in the lower segment and further strengthening on offline marketing.”
Faisal Kawoosa of TechArc further added, “While Make in India is a great initiative, it has missed the fundamental necessities of creating products and manufacturing in India. Our investment efforts have largely gone into contract manufacturing, rather than designing and developing Indian IP. What Chinese brands did is they saw this as an opportunity to align with the government’s vision without necessarily benefitting from the schemes and bring their assembly lines to India. This has allowed them to thrive in the India market despite government efforts.”