China’s Xiaomi continues to be the top smartphone vendor in India, according to a recent report, but analysts say it still faces uncertainties in the months ahead amid lingering tensions between China and India.
The Beijing-based smartphone vendor shipped a total of 5.4 million units in the second quarter, according to market research firm International Data Corporation (IDC).
While this was a 48.7 per cent year-on-year decline from the same period last year, other leading smartphone brands such as Samsung and Vivo, which came in second and third with 4.8 million and 3.2 million shipments in the quarter respectively, also suffered similar drops.
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Overall, the smartphone market declined 50.6 per cent to 18.2 million units, as the country remained under lockdown through the first half of the quarter, IDC said in a report published last Friday.
The findings mirror those of a separate report by Canalys, published last month, which said that while smartphone shipments in India shrank by nearly 50 per cent in the second quarter, Chinese vendors still lead the market.
But one analyst cautioned that Chinese brands continue to face uncertainty in India due to anti-Chinese tech sentiment stoked by Covid-19 and the deadly border clash between the two countries in June.
“Chinese smartphone brands could maintain their overall edge in the Indian smartphone market due to their quality offerings with affordable prices and lack of competitive choice,” said Yu Liuqing, Asia country analyst at The Economist Intelligence Unit (EIU). “But they face uncertainties such as a potential shrinkage of market share due to the broader anti-China mood.”
Yu added that a re-escalation of border tensions between China and India may still pose a risk, as both countries still have a strong military presence along the disputed border.
India has announced its intention to ban around 59 Chinese apps, and so far popular microblogging app Weibo, viral short video app TikTok, China’s ubiquitous messaging app WeChat and multiple others from China’s internet giants including the Post’s parent company Alibaba Group Holding, Tencent Holdings, Baidu, and Xiaomi have been targeted. Xiaomi’s browser was among the latest batch of apps taken down from India’s app stores last week.
The stakes are high for Chinese smartphone companies, which make up four of the top five smartphone vendors in the India market. According to the IDC report, Xiaomi accounted for 29.4 per cent of the Indian smartphone market in the second quarter.
The combined market share of Xiaomi and fellow Chinese brands Vivo, Oppo and Realme, which are also in the top five, added up to more than 66 per cent from April to June, up from over 60 per cent in the same period last year, IDC data showed.
In last month's Canalys report, research analyst Adwait Mardikar said local vendors are driving a “Made in India” message to consumers and eager to position their brands as “India-first”.
However, he added: “Despite the sentiment, the effect on Xiaomi, Oppo, Vivo and Realme is likely to be minimal, as alternatives by Samsung, Nokia, or even Apple are hardly price-competitive.”
Xiaomi’s made-in-India strategy – with over 95 per cent of its phones in the market made within the country as of April 2018 – could help further minimise the impact on the company by alleviating consumers “guilt” over buying Chinese products, according to Yu.
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This article China’s Xiaomi still leads India smartphone market despite escalating tensions, but for how long? first appeared on South China Morning Post