The falling economy in China took a major toll on Device ODM and OEM market place. The Mobility device sales including Smartphone are slowing down. The manufacturing capacity is higher than the market demand which also include the export market. The pressure on the financial forced many ODM to look towards the international market as OEM to keep running their assembly lines. Flushed with cash reserve many big names of China Smartphone segment started knocking Indian market. The extraordinary boom in e-commerce market segment of India and the players intention to grab the userbase were taken as opportunity by Chinese players to enter Indian market. One plus, Xiaomi, Meizu, Qiku, Coolpad, LeEco, Phicomm,Oppo, Vivo all entered into Indian marketplace through Online channel while collaborating with local Device servicing companies. The Discount offered by e-Commerce portal gave them instant access to broader reach to the market place. Being an ODM also, they were managed to keep the price of the device lower compared to Home grown Indian brands. The change in market dynamics dented the sales of Indian brands in big way and they scrambled to realign their strategy.
Vivo and Oppo infact opened their
wallet and went for carpet promotion of their product whereas new entrant like
LeEco and well established brand Gionee also went for advertisement route. On a
contrary, Indian Brand played it strategically an pulled down their
advertisement money to conserve their cash in order to be in the market place
for long.
In my opinion, most of the
Chinese brands are not EBITA positive and will not be the same in next threeyear. They hired Indian resources locally but the decision happens at the
headquarters. Indian Players are playing a waiting game when these brands will
be tired of buying market share on the basis of advertisement and discount and
will start pulling out the Indian market the way many Chinese application
provider after spending millions of $'s, acquired millions of user base but
failed to make positive RoI and pulled out of India.
India is a market place where
perception leads the product adoption not the Technology. For Indian, if they
spend even $100 on Smartphone then they want uninterrupted quality coupled with
servicing.
It will not be too far when
advertisement led Smartphone sell through as well as user acquisition will
start hurting the cash reserve of Chinese Brand and am sure that in next 12
months half of them will quit the Indian market place
