Indian Smart-Phone Makers Getting Solid Competition From Chinese Counterparts

BANGALORE: Who can forget the Sino-Indian War from October 20, 1962 to November 21, 1962? Thousands of soldiers laid their lives just to protect ours! Many decades have passed, and India & China has been in a state of cold war ever since. It’s 2016 now, and it’s China vs. India again! Only the means and the grounds of warfare have changed! The blood will be spilled this time, but only digitally! It’s the battle of the SMARTPHONE MARKET!

Indian smart-phone makers have had a big boost recently as BJP government has kicked off initiatives such as Start-up India, Digital India, and Make-In-India. But now Chinese smart-phone makers are trying to give their Indian counterparts a solid competition. Chinese smart-phone makers are advertising and marketing their brands in India like never before reports BI INDIA BUREAU. The Brand presence of Chinese brands such as Vivo, Gionee, Oppo, and LeEco has predominantly increased recently. They have even doubled the commission for advertisers by 10 per cent. The point to notice here is that these smart-phone makers have chosen offline medium than online to advertise. This is not strange at all, given that 65.2 percent of Indian population don’t use Internet (Source: internetlivestats.com).

This recent increase in branding by Chinese smart-phone manufacturers has got the Indian counterparts to set new goals for re-strategizing and re-branding. "Indian players, which usually operate on 2-3 per cent margins, are facing tough competition from Chinese players. Further, online-only Chinese players are willing to sacrifice margins, even go into negative margins," commented Tarun Pathak, Research Senior Analyst, Counterpoint.

For offline advertisements, mainly the bodegas and convenience stores have been targeted by the Chinese manufacturers and charges between 30,000 and 31 lakh INR are being paid to them. This sort of advertisements was notably done without paying a single green bill earlier. "Tapping the retailers for a branding opportunity is a great idea which is proving to be effective for us," added Vivek Zhang, CMO, vivo India. This has compelled Indian smart-phone makers to increase their marketing and advertising budgets.  “We've always maintained that significantly high advertising spends and trade margins to gain short-term market share is unsustainable - especially true in the current scenario where overall industry margins are under pressure," said Shubhajit Sen, CMO, Micromax Informatics.

The first quarter of 2016 (up till the month of March) saw Chinese Smart-phone players having 22 per cent share of the overall sales, and reports suggests that given the investments they are making in advertisements, this will increase to 25 per cent in the next quarter. Heavy investments on advertisements has also been confirmed by the LeEco's COO Atul Jain, as he said, “We have spent about $10 million (about Rs 67 crore) on marketing online and print in the first quarter this year, and we will spend similar amounts for quarters to come”.

Wars on the battlefield are a historical thing now and war of economy has taken its place. All thanks to technology! And with the Chinese smart-phone makers investing heavily in branding, Indian players such as Micromax , Intex , Lava and Karbonn Mobiles have to compete aggressively. The first chapter of the battle has been won by the Chinese and Indian counterparts needs to re-strategize in order to win the war!

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