Why Chinese smartphones are facing first-ever demand drop in India

For the first time, demand for Chinese smartphones dropped in India as buyers shift to premium models; rising component costs are also pushing prices higher

India’s smartphone market is changing fast and Chinese brands, that once dominated the affordable segment, are feeling the biggest impact. As more consumers shift towards premium devices, sales of brands such as Xiaomi, Oppo, OnePlus and Realme declined for the first time in India in the last financial year, according to a report by The Economic Times.

 

The combined revenue of the nine largest Chinese electronics companies operating in India fell 4.5 per cent in FY25. This marks the first revenue decline for this group in the country. In the previous year, these companies had reported a sharp 42 per cent rise in revenue.

 

Shift away from budget phones

 

The slowdown has been driven largely by shrinking demand in the entry- and mid-level smartphone segments. The news report, citing data from Counterpoint Research, said that the value share of smartphones priced below ₹20,000 dropped to 29 per cent in 2025, down from 38 per cent two years earlier.

 

The data also showed that the retail value share of Chinese smartphone brands -- including Vivo and Lenovo-owned Motorola -- fell from 54 per cent in 2023 to 48 per cent in 2025. However, in terms of volumes, they continue to dominate the market, with their share ranging between 73 per cent and 75 per cent.

 

The news report quoted industry experts as saying that the weakness in the mass and mid-range segments may continue, even as demand for premium smartphones grows. Prices of smartphones are also increasing due to a sharp rise in the cost of key components, especially memory chips.   

 

Premium segment sees strong growth

 

While budget phones are struggling, the premium category is expanding rapidly. Smartphones priced above ₹45,000 have seen strong growth, with their retail value share rising to 47 per cent in 2025 from 36 per cent in 2023.

 

This trend has benefited companies like Apple and Samsung. Apple’s India sales grew 18 per cent in FY25 to ₹79,378 crore, while Samsung recorded a 12 per cent increase to ₹1.11 trillion. Premium-focused brands are gaining value market share as consumers opt for higher-end models.

 

Among Chinese brands, Vivo performed better than its peers, posting an 11 per cent rise in revenue, helped by its premium portfolio, the news report said.

 

Despite the overall decline, Indian consumers still spent nearly ₹1.65 trillion on products from the nine leading Chinese brands in FY25, slightly lower than ₹1.72 trillion in the previous year.

 

Companies expect recovery

 

In its filing, Oppo Mobiles India said its sales dropped 38 per cent in FY25 due to lower volumes, which also affected profits. OnePlus said recent fluctuations in sales and profit were linked to investments in systems, compliance and infrastructure to support long-term growth, the news report said.

 

Most companies have expressed hope that business volumes will improve in the current financial year. However, analysts, as cited by the news report, believe the road ahead may remain challenging as rising prices and shifting consumer preferences reshape India’s smartphone market.