Business / Technology

Ringing the smart bell for success in India

By MAN RANJITH (China Daily) Updated: 2015-05-13 07:37

Recently, my teenage son back home in India asked if I could treat him to a Xiaomi Mi4i smartphone, or what he called "the ultimate style statement".

Many Chinese brands have truly gone global, so much so that some are already household names, even in India. For many years, the country's smartphone market has been dominated by the likes of Nokia Nokia Oyj and Samsung Electronics Co Ltd.

But today companies such as Xiaomi Inc, Gionee Communication Equipment Co Ltd, Oneplus Co Ltd, Oppo Electronics Corp, Lenovo Group Ltd, Huawei Technologies Co Ltd and ASUSTeK Computer Inc are reported to be scrapping hard for business.

Last year, Xiaomi started offering its smartphones through flash sales on Indian e-commerce website Flipkart, but not even its eternally optimistic CEO Lei Jun could have foreseen the overwhelming response it got, as its phones sold out in a matter of 2.4 seconds to 5 seconds.

When the company launched its Mi4i model, described by one commentator recently as having a "cute and colorful, rounded plastic frame", in India in the last week of April, it saw hundreds of customers making a beeline for its experience centers to catch a glimpse of what it was trumpeting as India's new "flagship phone".

Like Xiaomi, Gionee has enjoyed a warm welcome in India. Enthusiastic officials claim that on average, an Indian smartphone user upgrades to a new Gionee phone every seven seconds.

Joining the fray are Lenovo, which now owns the Motorola brands that remain popular in India, and Huawei, which plans to sell 10 million phones in the next two to three years in India.

Despite all the hype, however, the cold hard sales figures still reveal the Chinese brands have a long way to go in India to gain anything like sizable share.

Xiaomi, the biggest Chinese seller, still accounts for just 4 percent of the market.

Home-grown brand Micromax remained the most sought-after smartphone brand, with a dominant 22 percent share last year, nudging out erstwhile leader Samsung (20 percent), according to Indian market research firm Canalys.

But the Chinese smartphone makers are betting big on India, and for good reason: Indians bought 21.6 million of them in the fourth quarter of 2014, making it the world's third-largest market in terms of sales, according to analysts' estimates. During the full year, 53 million handsets were sold, according to German market research firm GfK.

Xiaomi has sold about 90,000 Mi3s through five flash sales since its launch on July 23, 2014.

But despite embracing what is being seen as one of the greatest initial surges in brand loyalty ever, and the fact that its phones sell for half or less of what other international brands do ($200 for its popular Mi3 model, against Google Inc's Nexus 5 at $470), industry experts still suggest Xiaomi may find it tricky to sustain its momentum.

"If Chinese brands are going to take on rivals, around the world, they need to dazzle us with something we have never seen before, much like Sony did with its life-altering Walkman," said Michael Schuman, a Beijing-based journalist for US magazine Time.

Others add that with initial euphoria over flash sales slowly fading, Chinese brands will also have to tackle what is arguably the biggest issue in the vast Indian market: after-sales, something where even big names like Samsung have been found wanting.

Once Xiaomi, Gionee and the others have managed the tricky task of establishing a chain of efficient service centers, only then will they see their market share increasing, said Deepak Kumar, an independent industry analyst.

But let us leave the subject on an optimistic note, with the last word coming from a real expert, considering that his age bracket is considered the key target group in India.

"It (the Xiaomi Mi4i) is a beautiful gadget that performs well, looks stylish and is value for money," said my son. "Nobody wants an Apple or a Samsung anymore."

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