Decline of Indian Smart Phones Market

India is the second largest market for smartphones in the world after China. India has more smartphones users than the entire population of the USA. In the year 2015, the Indian mobile companies have the market share of more than 52% and they were performing well in the market. But suddenly their market starts declining when the Chinese mobile companies entered into the market. Now, the situation of Indian companies is that they have only 2% share in the market of mobile phones.

The combination of very high sales volumes and the average smartphone consumer behavior has made India a very attractive market for foreign vendors. Currently Xiaomi is leading smart phones with 30% share in Indian market. BBK Electronics is a parent company of OPPO, REALME, VIVO & ONEPLUS with 28% share in the market according to IDC report. These five brands hold large portion of smart phone industry in India.

There were many reasons behind Indian smart phones companies went out of the business.

1.      Lack of Technological Innovation:-  The Indian mobile companies at that time were doing the great business but they did not focused on the research and development for their phones. When India was moving towards the 4G technology and the new improvements were designed in the mobile technology. The Indian companies were enjoying the profits and they did not reinvest to develop new innovative products to compete in the market. The customers always attracted towards the innovative and different products and Indian companies fails to provide. So, after few years they went out of the market and the space is occupied by the Chinese giants.  

 

2.      Sudden shift to 4G:- After the launching of VOLTE 4G technology by JIO in India, the Chinese mobile companies were manufacturing the 4G mobiles under INR 10,000 range and the Indian companies were still manufacturing the 3G handsets with a heavy stock of it. This sudden shift in technology was also the reason for a sharp decline of Indian mobile companies. The Indian companies were not ready for 4G, but companies like Xiaomi, Oppo, Vivo, & Oneplus has already started capturing the market.

 

3.      Poor After Sales Services:- During the year 2010-15, when there was a demand of Indian mobile companies, they were acquiring 53.4% market share. But these mobile phones had various issues like hang problem, software crash, battery problems, charging socket were the main which requires the service centers to resolve them. the after sales service of the Indian mobile companies was very pathetic and they were not able to provide the customer satisfaction. On the other hand, Chinese Smart Phones Companies were giving satisfactory Sales Service so that the customer shifted towards the Chinese companies and the Indian smart phones went out from the business.

 

4.      Dependency on Chinese Manufacturing:- The Indian mobile manufacturers were also depended on the Chinese manufacturers for the fabrication of PCB chips for the mobiles as they did not have the manufacturing plants. After analyzing this opportunity, the Chinese companies entered into the market in the lower and medium segment mobile phones at very cheap rates.

 

5.      More focus towards offline centric model:- Indian Mobile companies were more focused towards the traditional distribution channel which includes a lot of commission to the retailers, distributors and wholesalers, while the India is moving towards the E-commerce and the Chinese giants took the benefit of online launching & selling and they bifurcate the traditional channel.

 

6.      Advertising Tactics:- The Indian mobile companies were into the low and medium segment of the mobile phones and their advertising tactics were very poor and they were not visible while the Chinese mobile companies like Vivo and Oppo took the sponsorship of Indian Premier League which created the brand image for these mobile companies. They also did the celebrity endorsement for their product which created the demand in the market.

 

These are some reasons for declining the market share of Indian smartphones companies. But there is still a hope for the Indian companies if they freshly start with new innovative products in the medium and lower mobile phone segments with the features more than their competitors at the reasonable rates on the online platforms.