Chinese smartphone makers Vivo and Oppo giving tough competition to the home grown vendors


Increase in disposable income, presence of multiple Indian brands, entry of more and more Chinese smartphone makers and exclusive online distribution of smartphones are some of the reasons that are driving the growth in the Indian smartphone market.

In the past, when there were only features phones, the use of smartphones was a fantasy to the middle class and a reality for the rich. Feature phones were vital source of communicating when people were not that tech savvy and the only reason of owning a phone was to call or message someone. But now, smartphones have rapidly become a viable alternative to products like feature phones, Personal Digital Assistants (PDAs) and laptops; offering components such as voice and SMS coupled with mobile internet applications, multimedia functionality, high speed data processing capabilities and inbuilt GPS capabilities. The smartphone market in India is one of the fastest growing markets in the world and not so surprisingly this is attracting many global manufacturers to enter this space.

According to a recently published report of Bonafide Research, "India Smartphone Market Outlook, 2020", Chinese smartphone vendor BK Electronics, who has brands like Oppo and Vivo in India, has entered the top ten manufacturers list in FY 2016-17 and have seized a market share of more than 10% in terms of total shipments. Oppo and Vivo are sub-brands owned by BBK Electronics, which has been one of the biggest OEMs in the electronics industry. Oppo entered in the year 2013 and Vivo entered in the Indian market in 2014. Both these brands are catering to the premium smartphone segment in the country. Due to a margin payout that is 5-6% more than what the other international or local mainstream brands offer, both the brands have been emerging as the trade favourites among sellers in India. Moreover, they are shelling a higher amount in terms of payment for display space and branding. All of this is creating rapid inroads for both these brands into the smallest of neighbourhood stores where Samsung and domestic brands used to rule. Hence, the Chinese intrusion on the Indian smartphone market has started to give tough competition to the domestic as well international brands like Samsung, Micromax and Intex. Entry of these Chinese phone makers made domestic brands suffer in their market shares during the last financial year 2016-17. Both the brands are now making investments on product service and the price is bound to be cheaper for the consumer on a like-to-like basis than the mainstream brands without any compromise on quality.

Vivo increasingly focused on the Indian market and has recently been appointed the exclusive sponsor for the IPL tournaments replacing long time brand Pepsi. Oppo also had a tie-up with popular India TV reality show ''Bigg Boss'' to reach the common household on a daily basis. Looking purely from numbers, Vivo and Oppo seem to be doing exactly what is required to earn such growth by strategising to be on the top of mind. Within a span of 2-3 years since their entry in India, Oppo and Vivo have made such a remarkable development in India that almost every mobile store has a promotional banner of either Vivo or Oppo. Another Chinese brand, Xiaomi has taken the Indian smartphone market by storm. Even though, it entered the market with a primary focus on online sales and minimalistic product portfolio, the brand managed to earn the hype and market share in FY 2016-17. From FY 2015-16 to 2016-17, the company's shipment increased by almost 67%, indicating the fact that Xiaomi is all geared up to take on the domestic as well as international smartphone manufacturers.

Major companies operating in the smartphone market of India are Samsung Electronics India Private Limited, Lenovo (India) Private Limited, Apple India Private Limited, Xiaomi Technology India Private Limited, Micromax Informatics Limited, Intex Technologies (India) Limited, Oppo Mobiles India Private Limited, Vivo Mobile India Private Limited, Panasonic India Private Limited and Asus India Private Limited.

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Chinese smartphone makers Vivo and Oppo giving tough competition to the home grown vendors in the Indian Smartphone Market: Bonafide Research

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Published on

Sep 06, 2017

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