Indians spent over Rs 50,000 crore on Chinese phones in FY18

KOLKATA: Consumers in India spent more than Rs 50,000 crore in FY18 on purchasing smartphones made by just the top four Chinese brands, nearly twice what they spent on them in the previous fiscal. That trend is set to continue with Chinese brands dominating the Indian smartphone market, analysts and industry executives said. 

The four — Xiaomi, Oppo, Vivo NSE 0.00 % and Honor — along with a few other Chinese brands like Lenovo-Motorola, One-Plus and Infinix, make up more than half of the total Indian smartphone market by sales. Sales of Chinese brands are growing rapidly this year too, as per the data available thus far, analysts said. 

The Chinese brands are launching high-specification models at lower prices than South Korean, Japanese and Indian companies and have successfully established themselves as global brands, in line with the Indian consumer’s preference for products made by multinationals, two analysts said. 

Counterpoint Research associate director Tarun Pathak said the top Chinese brands have easy access to the Shenzhen hardware and R&D hub and the supply chain ecosystem. “This has helped them to be innovators and to be always on top of trends,” he said. 

India stands to gain with Xiaomi, Oppo, Lenovo-Motorola, Huawei and Vivo investing in local manufacturing and creating jobs, thanks to Make in India policies. Xiaomi announced plans to invest Rs 15,000 crore in smartphone component manufacturing in April. Oppo is establishing two new manufacturing facilities in Uttar Pradesh. 

Vivo employs more than 5,000 people in its plant. The chief of one of the largest cellphone retail chains said the Chinese brands have established themselves in key price segments — Xiaomi in the Rs 6,000-13,000 band, Oppo and Vivo in the Rs 10,000-22,000 one. Honor is gaining share in the Rs 8,000-12,000 segment. 

“These price segments account for more than 80% of the overall market where no Indian brands have managed to cut the ice and Samsung is the sole non-Chinese brand to fight it out,” he said, requesting anonymity due to business reasons. As per Registrar of Companies (RoC) filings for FY18,



Xiaomi Technology India’s revenue from operations was Rs 22,947.3 crore (Rs 8334.4 crore in FY17); that of Oppo Mobiles India was Rs 11,994.3 crore (Rs 8,050.8 crore); that of Vivo Mobile India was Rs 11,179.3 crore (Rs 6,292.9 crore) and Huawei Telecommunications India’s mobile business revenue stood at Rs 5,601.3 crore (Rs 3,584.2 crore). 

The combined sales of these four Chinese smartphone makers in FY18 almost doubled to Rs 51,722.1 crore from Rs 26,262.4 crore in FY17, despite already being on a higher base. While Xiaomi and Huawei have been profitable in the Indian market, Oppo and Vivo are yet to break even. As per Hong Kong-based Counterpoint Research, the Indian smartphone market was valued at around Rs 1.5 lakh crore in FY18 compared with Rs 1.7 lakh crore for the total mobile phone market. Market research provider Euromonitor International pegged the Indian smartphone market at Rs 1.1 lakh crore in calendar year 2017 and projected sales for 2018 to touch Rs 1.2 lakh crore. The smartphone market is growing at about 10-11%, it said. 

Analysts reckon the Chinese aggression in the Indian smartphone market will continue in the current fiscal as well with OnePlus retaining leadership in the Rs 30,000-plus premium segment for two consecutive quarters; the launch of new sub-brands such as Pocophone by Xiaomi and Realme by Oppo; and the high growth of newer Chinese players like Transsion Group with its Itel, Tecno and Infinix brands. 

A Huawei India spokesperson said its Honor smartphone brand with its India-first approach had registered unprecedented growth of 281% in the first half of 2018 and was among the top two brands in the online segment in the April-June period on the back of several new launches across price segments. 

Compared with the Chinese performance, Samsung, which has been present in India for two decades, posted smartphone sales of Rs 34,261 crore in FY17 while Apple posted sales of Rs 13,097 crore in FY18. Another Chinese smartphone maker, Lenovo-Motorola, posted sales of Rs 11,950 crore in FY17 which, however, includes the revenue from laptops and hardware too. The financials of Samsung and Lenovo-Motorola for FY18 are not available.