Forbes India 15th Anniversary Special

Chinese smartphone vendors make inroads in India, boost market share

4G phones outsell 3G handsets during the December 2015 quarter

Harichandan Arakali
Published: Feb 16, 2016 05:29:15 PM IST
Updated: Feb 16, 2016 05:37:34 PM IST
Chinese smartphone vendors make inroads in India, boost market share
Smartphone sales in India rose 28.8 percent to 103.6 million units in 2015 versus 2014

In the October -December 2015 quarter, 25.6 million smartphones were sold in India, based on units shipped from vendors, a 15.4 percent increase from the same period in 2014. For the first time, India crossed the milestone of a 100 million units sold in a year, in 2015, according to IDC.

Smartphone sales in India rose 28.8 percent to 103.6 million units in 2015 versus 2014, "positioning India as one of the fastest growing smartphone market in Asia Pacific," IDC said in a press release.

IDC expects smartphone sales to continue to grow at double digits in 2016 and that smartphones will overtake feature phones this year.

Chinese vendors boosted their sales in India by 71 percent in the December quarter of 2015, Jaipal Singh, a market analyst at IDC said in a press release. China-based smartphone companies, including Lenovo, raised their market share in India from 15 percent in the fourth quarter of 2014 to 22 percent at the end of Q4 of 2015. Indian smartphone makers, on the other hand, saw their share slip from 43 percent to 38 percent.

Samsung, helped by strong sales of its Galaxy J series of 4G smartphones, remained the market leader, with a 26.8 percent share.

"Good quality, big discounts by e-tailers and higher specification at lower prices are factors for which Chinese smartphones are preferred over others especially in the $100 to $300 price band," Singh added.

More than one in three smartphones sold in India is now sold online, at 37.3 percent, with strong sales seen on "online-exclusive" models, Karthik J, a senior market analyst said in the release.

As the smartphone market in China begins to slow down, most vendors including Chinese players are now looking for ways to tap India's growth potential, and the online channel negates the need to set up a complex distribution network to reach target customers, IDC said in the release.

However, having gained a foothold via online sales, many of these vendors are also investing in longer-term brick-and-mortar presense as well, the market researcher said.

The December quarter also saw sales of 4G handsets jump to 13.9 million units, accounting for more than half of the market in the three month period, and surpassing the number of 3G phones sold in the period.

'Make in India' is getting a boost as well, as Chinese vendors such as Xiaomi start making some of their phones in India. For now, however, Samsung and Indian vendors such as Micromax Informatics lead the way in locally manufacturing the phones they sell in the market. Almost every second smartphone sold in India today is locally assembled.

"Local manufacturing should gain further traction in 2016 as more and more vendors are willing to benefit from lower import duties and tax structures on semi-knocked-down units," IDC research manager Kiranjeet Kaur in Singapore, said in the press release. "This year could also be the beginning of completely-knocked-down manufacturing in India, taking local manufacturing to the next level."