“The government should be more supportive of their people.” Narendra Bansal, founder of Intex Technologies, an Indian technology company that was the second largest mobile vendor in the country by volume less than two years ago, pleaded earlier this year. Bansal is one of several top executives from Indian smartphone vendors who are furious at losing market share to Chinese companies in the past two years.
In the plea, Bansal – alongside chief executives of other Indian smartphone vendors like Micromax and Karbonn Mobiles – accused Chinese smartphone vendors of dumping low-cost smartphones in India, making it tougher for the local businesses to survive. The government should introduce an “anti-dumping” duty on such phones, the CEOs suggested. “Every child needs hand-holding by their parents,” Bansal said at the time.
Over the past two years, Indian smartphone vendors have lost about 35 percent of the market to Chinese companies. Just two years ago, Micromax, Karbonn Mobiles, Lava and other local players had more than 54 percent market share, according to data from marketing research firm Counterpoint. In the quarter that ended in June this year, Chinese players had surpassed 50 percent of the market for the first time in India since entering the nation, according to IDC.
The outcry from the Indian smartphone vendors was, in a way, a public admission that they could not fight back against the Chinese brands – with increased marketing, cutting down the retail price of their phones, and embracing the online strategy, all falling short. But to understand how it all happened, you will have to look at the history of the phone business in India and the ever changing relationship between the companies.
Building ‘Indian’ brands
A decade ago, when Apple was about to announce the first iPhone, mobile phone stores in India were still filled with feature phones, and smartphones as we know them today were still a few years away. In China and Taiwan, two of the largest electronics manufacturing capitals of the planet, the growth of feature phones was slowing down, says Jayanth Kolla, founder and partner at Converence Catalyst. Around the same time devices manufacturing business at both the places was starting to get commoditised, leaving little scope for profits to the companies, he said. “It became a cottage industry there. It was easy for any small company to try its own hands at manufacturing mobile phones,” he added.
While Steve Jobs was attempting to revolutionise the smartphone industry, a revolutionary idea of sorts was also being explored at the headquarters of the Indian mobile industry of the time. For years, these companies had served as distribution partners for Nokia, Motorola, Sony Ericsson, LG, and other companies.
[“Source-timesofindia”]
