Mirroring the same pattern, more exits than entry of smartphone players is expected in 2019 as major brands like Xiaomi, Samsung, Vivo, Oppo continue to consolidate their share by eating into those of the smaller brands, analysts say. Counterpoint Research predicts the exit of 15 smartphone players in 2019 versus entry of five players. CMR sees nine new entrants versus 10 exits in 2019.
As per CMR estimates, India currently has around 200 smartphone players operating in the market. At its peak in 2014-15, the mobile phone market had over 300 smartphone players.
The churn in India comes amid continuing growth in the world’s fastest growing smartphone market, compared with declines globally.
In 2018, India was among the only major smartphone markets to have grown– by 10% – and is expected to grow further 10% in 2019, according to data from Counterpoint Research. In comparison, global smartphone shipments fell by some 4% on year in 2018, which China’s shipments falling 7% on year. Global smartphone shipments are expected to decline further – by around 3% – in 2019, expect analysts.
“India becomes important also in terms of huge hitherto untapped base for smartphone consumers in next three-five years along with favorable manufacturing policies and ecosystem development efforts by the government,” said Navkendar Singh, associate research director, devices and ecosystem, India & South Asia, IDC.
Counterpoint’s research analyst Shobhit Srivastava added that the growing e-commerce channel is another favoring reason for the brands to enter the Indian smartphone market.
“China-based Realme was a standout hit in the India market in 2018. Realme’s success shows that there is still a market for new players. India offers growth opportunities not just in Tier-1 cities, but beyond,” Prabhu Ram, head-IIG, CyberMedia Research.
Sector watchers further believe that the Indian smartphone market is becoming highly competitive due to the presence of aggressively expanding Chinese brands leading to a price and specification competition in the country.
Smaller brands that are unable to provide the same specification as that provided by the Chinese brands (with backing of the Shenzhen ecosystem) end up exiting the market to cut their losses, they said.
Chinese smartphone brands Xiaomi, vivo, Oppo had together cornered market share of 46% in 2018 leaving Indian brands like Micromax, Lava, Intex and Karbonn with a combined market share of mere 8% during the same period, as per CMR. Adding to this, Samsung grabbed 26% market share, thereby leaving 16% market with other smaller smartphone players in India to operate in.
IDC’s Singh pointed how brands like Xiaomi, Samsung, vivo, Oppo have invested a lot of time effort and money in building the brand, channel and bringing right kind of product mix to Indian consumers. Smaller brands are not able to commit volumes and find demand with their half-hearted attempts of going for one channel (online or offline).