In 2014, home-grown Indian smartphone brands such as Micromax and Intex entirely dominated the domestic smartphone segment with a 54% market share. After five years, as top global smartphones entered India, they were relegated to the bottom with just 10% market share. In fact, in the second quarter of 2018 alone, a massive 41% of Indian smartphone buyers hung up on Micromax. Intex ranked second among losers with 11.6% customers dropping out, while Karbonn lost 5.3% market share.
Bajaj Finserv EMI Store not only brings you an amazing selection of best-selling smartphones but latest updates, viewpoints and analysis from the Indian technology market. In this section, we will attempt to figure out why homegrown smartphones companies such as Intex, Lava, Karbonn and Micromax were no match for Chinese brands like Redmi smartphones and other Xiaomi, Oppo and Vivo mobile phones. There are several reasons why Indian smartphone companies failed against these top global smartphone manufacturers. Here we’ll explore some of the reasons why they failed.
The Micromax story
If we want to describe the failure of Indian smartphone brands, one example would suffice. That is the rise and demise of Micromax smartphones. In this entire story of success and failure, Chinese brands such as Xiaomi smartphones, Oppo and Vivo mobile phones have played a vital role. At one point in time, while these Chinese brands were responsible for the stupendous success of homegrown brands such as Micromax, they also played an instrumental part in their failures. What happened then, how these Chinese brands, now among top global smartphone manufacturers, led to the fall of domestic smartphone brands? It’s an interesting story.
Indian phones were basically white label products
In 2007, when Apple’s iPhones introduced the concept of smartphones to the world, Indian stores were mostly selling feature phones. Nokia dominated the mobile phone market in India and top versions were quite expensive. Then, a ground-breaking moment in the Indian mobile phone industry occurred – this new idea or concept literally led to the birth of the mobile phone industry in India.
Companies such as Micromax, Spice, Lava, Karbonn, Intex and other brands hit a pot of gold. They partnered with Chinese original design manufacturers (ODMs) and entered into white-labelling contracts with them. Simply put, in a white-labelling deal, the product manufacturer designs and makes the product for mass consumption, and any other company enters into an agreement with them to put their label or brand name on it and sells them.
Homegrown Indian smartphone brands had two advantages compared to Nokia and other original brands then, with the help of Chinese ODMs they could release new models in the Indian market in around three months. On the other hand, Nokia and other manufacturers took at least a year in bringing new products to the market. The other advantage was the cost. Micromax, Karbonn, Intex and other domestic phone brands could bring new models at comparatively low-cost than Nokia, Motorola and other global leading brands.
That was when home-grown Indian smartphone brands such as Micromax, Intex and Lava sold 54% of all mobile phones sold in India.
Lack of investment in research and development
Indian brands started to bet big on their low-cost phones that were basically look-alikes. They spend a lot of money on marketing and advertising, paying Bollywood and cricket stars hefty sums to endorse their brands. In hindsight, they would have been better off today if they had made major investments in research and development, which of course didn’t happen.
Soon the demand for smartphones started to surge by 2010-11 and Indian companies along with Chinese ODMs again capitalised on this demand with dual-SIM and low-cost smartphones. But all these phones were identical in hardware and software capabilities with no differentiator.
Chinese ODMs such as Vivo, Oppo and Gionee already knew the preferences of Indian phone buyers since they were manufacturing these smartphones for Micromax and several other Indian smartphone brands. They leveraged on their expertise, knowledge and manufacturing capabilities which was developed in the largest smartphone market in the world, China. Soon the lack of originality and low investments in research and design began to hurt homegrown brands. Xiaomi’s Redmi smartphones, Vivo and Oppo mobile phones offered original designs and invested hugely on marketing, retail and distribution. By February 2019, an International Data Corporation (IDC) report released that Xiaomi smartphones captured the biggest share of the Indian smartphone market in 2018 at 28.9%.
It was the end of the road for homegrown Indian smartphone brands. Until the government initiates some sort of a rescue operation and offers them protection from overseas brands, and most importantly, domestic brands spend more money on research and development, we might not see a resurgence of Indian smartphone brands again.
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