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Chinese smartphone giant Xiaomi continues to gain ground, dimming hopes for local brands: Bonafide Research
India's smartphone market has undergone a dramatic transformation, shifting from a feature phone-dominated landscape to a thriving smartphone ecosystem. While a diverse range of smartphone offerings is crucial in a market like India, Chinese brand Xiaomi, despite having a limited product portfolio and primarily relying on online sales, achieved exceptional success in the fourth quarter of FY 2016-17.
Previously, feature phones were the primary means of communication, but smartphones have revolutionized this by offering an array of advanced functionalities beyond calling and texting. Today, smartphones cater to all age groups, from young teenagers to older adults, due to their versatility and affordability. According to Bonafide Research’s report, "India Smartphone Market Overview, 2017-2020," the smartphone market in India has been growing steadily, although FY 2015-16 was a stronger year compared to FY 2016-17. The market offers smartphones at price points ranging from as low as Rs. 3,000 to premium models exceeding Rs. 80,000. The rise of e-commerce platforms has further fueled smartphone sales by offering attractive discounts, coupons, and deals to entice consumers.
However, the rapid rise of Chinese smartphone brands has intensified competition, impacting established players such as Samsung, Apple, Micromax, and Intex. These Chinese vendors have gained significant market share in a short time, positioning themselves as dominant forces in India’s smartphone industry. Xiaomi, often referred to as the "Apple of China," entered the Indian market in 2014 with its Mi 3 model, exclusively sold on Flipkart. Priced at Rs. 13,999, the Mi 3 sold out within 30 minutes on its first day, attracting over 100,000 registrations within a week. Xiaomi’s market share increased by approximately 3% between FY 2015-16 and FY 2016-17, significantly impacting Indian brands like Micromax, Intex, and Lava, with the latter even exiting the race among the top ten manufacturers.
Xiaomi continues to dominate the Indian market through its flash sales strategy, ensuring high demand for its budget-friendly smartphones. The Redmi Note 4, launched in three variants, saw a record-breaking sale of 250,000 units in its first sale, highlighting the brand’s growing popularity. While Xiaomi initially focused on online sales, it is now expanding its offline presence through its 'Mi Home' stores, with the first outlet opening in Bengaluru. This strategic move aims to strengthen Xiaomi’s position across both online and offline distribution channels.
Xiaomi’s key selling point is its competitive pricing, offering feature-rich smartphones at budget-friendly rates. For instance, a Xiaomi smartphone priced at Rs. 5,900 includes high-end features such as 2GB RAM, a 5-inch display, a 13 MP rear camera with LED flash, a 5 MP front camera, a 3,000mAh Li-Ion battery, and 16GB internal storage expandable up to 128GB via microSD. Such specifications at an affordable price have captivated Indian consumers, making Xiaomi a preferred choice. Given this trend, Xiaomi, along with other Chinese brands like Oppo and Vivo, is likely to continue overshadowing domestic smartphone brands in the near future.
Major companies operating in India's smartphone market include Samsung Electronics India Private Limited, Lenovo (India) Private Limited, Apple India Private Limited, Xiaomi Technology India Private Limited, Micromax Informatics Limited, Intex Technologies (India) Limited, Oppo Mobiles India Private Limited, Vivo Mobile India Private Limited, Panasonic India Private Limited, and Asus India Private Limited.
Previously, feature phones were the primary means of communication, but smartphones have revolutionized this by offering an array of advanced functionalities beyond calling and texting. Today, smartphones cater to all age groups, from young teenagers to older adults, due to their versatility and affordability. According to Bonafide Research’s report, "India Smartphone Market Overview, 2017-2020," the smartphone market in India has been growing steadily, although FY 2015-16 was a stronger year compared to FY 2016-17. The market offers smartphones at price points ranging from as low as Rs. 3,000 to premium models exceeding Rs. 80,000. The rise of e-commerce platforms has further fueled smartphone sales by offering attractive discounts, coupons, and deals to entice consumers.
However, the rapid rise of Chinese smartphone brands has intensified competition, impacting established players such as Samsung, Apple, Micromax, and Intex. These Chinese vendors have gained significant market share in a short time, positioning themselves as dominant forces in India’s smartphone industry. Xiaomi, often referred to as the "Apple of China," entered the Indian market in 2014 with its Mi 3 model, exclusively sold on Flipkart. Priced at Rs. 13,999, the Mi 3 sold out within 30 minutes on its first day, attracting over 100,000 registrations within a week. Xiaomi’s market share increased by approximately 3% between FY 2015-16 and FY 2016-17, significantly impacting Indian brands like Micromax, Intex, and Lava, with the latter even exiting the race among the top ten manufacturers.
Xiaomi continues to dominate the Indian market through its flash sales strategy, ensuring high demand for its budget-friendly smartphones. The Redmi Note 4, launched in three variants, saw a record-breaking sale of 250,000 units in its first sale, highlighting the brand’s growing popularity. While Xiaomi initially focused on online sales, it is now expanding its offline presence through its 'Mi Home' stores, with the first outlet opening in Bengaluru. This strategic move aims to strengthen Xiaomi’s position across both online and offline distribution channels.
Xiaomi’s key selling point is its competitive pricing, offering feature-rich smartphones at budget-friendly rates. For instance, a Xiaomi smartphone priced at Rs. 5,900 includes high-end features such as 2GB RAM, a 5-inch display, a 13 MP rear camera with LED flash, a 5 MP front camera, a 3,000mAh Li-Ion battery, and 16GB internal storage expandable up to 128GB via microSD. Such specifications at an affordable price have captivated Indian consumers, making Xiaomi a preferred choice. Given this trend, Xiaomi, along with other Chinese brands like Oppo and Vivo, is likely to continue overshadowing domestic smartphone brands in the near future.
Major companies operating in India's smartphone market include Samsung Electronics India Private Limited, Lenovo (India) Private Limited, Apple India Private Limited, Xiaomi Technology India Private Limited, Micromax Informatics Limited, Intex Technologies (India) Limited, Oppo Mobiles India Private Limited, Vivo Mobile India Private Limited, Panasonic India Private Limited, and Asus India Private Limited.
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