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Xiaomi's logo  (Reuters)
Xiaomi's logo (Reuters)

Chinese smartphone brands see drop in market share in India for first time in many quarters

  • South Korea's Samsung took over the top spot in India from Xiaomi this quarter
  • Shipments from Chinese companies have seen greater scrutiny at customs since June

Two-quarters of anti-China sentiments, supply chain troubles, and geopolitical issues between India and China seem to be catching up with Chinese smartphone brands in the country. This is the first time leading brands like Oppo, Vivo, Realme, and market leader Xiaomi have shown real chinks in their armor.

In its third-quarter market report yesterday, Counterpoint Research said that Samsung took over the top spot in India from Xiaomi in this quarter. Another research firm, Canalys, though had Xiaomi on top at the end of the third quarter. While the two reports do not conform on who leads the market, both show that Chinese brands dropped market share in India.

Second and third-quarter data from both firms showed that Xiaomi, Oppo, and Vivo dropped 1-2% market share between the third and fourth quarter. These three brands, along with Realme and Samsung, have made up the top five in India for over two years now. In fact, according to Counterpoint, Samsung took over the top spot for the first time since the fourth quarter of 2018. It’s worth noting that Oppo, Realme, and Vivo are all owned by the same Chinese company - BBK Electronics.

Dampening sales
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Dampening sales

According to experts, the reasons for this range from tensions between the two countries to a strong resurgence from Samsung in terms of feature sets. A big offline retailer from South India said despite having differences of opinions with how the South Korean company treats online and offline markets, retailers have been selling Samsung phones more because of growing demand.

On the other hand, Chinese brands have been having trouble getting their shipments into the country. According to an industry executive from a top smartphone brand, shipments from Chinese companies have seen greater scrutiny at customs since June, while those from companies like Samsung, Apple, etc. have been allowed to pass without as much delay. While Chinese companies were able to get their shipments into the market before the big e-commerce sales earlier this month, this could have affected how the market share moved too.

“Samsung was the only brand that came back strongly after the lockdown and production has been running at full capacity ever since," said Tarun Pathak, Associate Director at Counterpoint Research. “In the case of Oppo, the factory was not running at full capacity even after Q2, which impacted Realme and OnePlus as well. Chinese shipments were held at ports in June. But that is no longer the case," he added.

According to Faisal Kawoosa, chief analyst and founder of market research firm techARC, the anti-China sentiments in India built to a level where Chinese brands at least “felt" something might happen. “At the end of the day, shipment is an anticipation of the number that you can sell. When a company procures components they do that based on the likely number they can sell," he added.

Samsung isn’t the only non-Chinese brand that has done well in India either.

American technology giant Apple has enjoyed a successful few months in India too. Pathak said the company was the number one brand in the premium segment in India in the third quarter. Though this makes for a very small part of the overall smartphone market in India, Apple has usually trailed brands like OnePlus in this segment. The company had improved its position in Q2 as well, said Pathak.

The trend might continue a few quarters too now since the Indian market exhausts the majority of its potential during the festive quarter. Brands procure products for the festive quarter (October-November) in September, said Kawoosa. “I don’t think the positioning will change substantially in Q4 for Xiaomi or other Chinese brands," he said.

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