Tension apart, India fuels Chinese phone majors' global targets

Estimates show without India, Chinese firms would have remained big boys only in their home markets

New Delhi’s relations with Beijing may be tense at this point of time, but Chinese mobile phone companies want their love affair with India to continue to deepen. That’s because a large number of these companies are increasingly depending on India to meet their global ambitions.

Estimates suggest that without India, the Chinese companies would have remained the big boys only in their home market.

According to the GfK global handset update for March 2017, India constitutes 67 per cent of Xiaomi’s smartphone global sales, with the success of Redmi 4 significantly contributing to this. The company’s second-largest market, Indonesia, makes up a distant 16 per cent of the global sales.

For Vivo, 73 per cent of its global sales come from Indian consumers. In the case of Oppo, 48 per cent of its global sales flow from India. Indonesia is again the second-largest market for both Vivo and Oppo, contributing 8 per cent and 18 per cent, respectively, to their global sales.

For Gionee, another important player from China, one-fourth of its total sales across the world (including China) comes from Indian buyers.

Global market makes up 30 per cent of Xiaomi’s total sales. In the case of Oppo, it is around 34 per cent, and for Vivo, it is about a fourth of its total sales.

GfK, a Germany-based research company, did not respond to a query sent by Business Standard.  

A Xiaomi spokesperson said, “India is the most important and largest market for us outside China. Our chairman has announced that we would like to invest $500 million in India over the next three to five years in manufacturing, R&D after sales etc, after having invested the same amount till now in the existing business.” He refused to comment on specific numbers.
 

Xiaomi pointed out that based on the International Data Corporation (IDC) figures, it is ranked number two in the smartphone market with a 14 per cent share, and number one online smartphone vendor with a 40 per cent market share for the first quarter of 2017.

An Oppo spokesperson, when asked about the dependence on India for global sales, said, “We believe that India as a market is growing constantly and has a lot of potential and has come a long way”. Vivo and Gionee did not respond to queries. According to various estimates, Indian consumers will buy over 130 million smartphones in 2017. However, over 80 per cent of the phones are likely to be 4G powered. India will constitute more than 15 per cent of total mobile phone sales in 2017. 

In the global sweepstakes, Vivo and Oppo in the first quarter of 2017 are already among the top five global smartphone manufacturers, according to the IDC.

In fact, Xiaomi figures in the top five list in the low-end smartphone market, ranging from $100 to $250, analysts said. In making this happen, India’s contribution is counted just next to their home market.

In contrast, Chinese major Huawei does not depend much on the India sales. In the case of Huawei, the big overseas markets are in West Asia and Africa, followed by Europe. And, while the Lenovo group (includes Lenovo and Motorola and ZUK) is among the top five in terms of sales in India, it is not even among the top five smartphone manufacturers of the world.