New entrants gain foothold in Indian smartphone, TV market

Not long ago, big global players ruled the Indian smartphone and TV markets. What were the brand choices in the noughties while buying a reliable smartphone? The popular offerings all came from Apple, Samsung, BlackBerry or Nokia. The market share of other brands was negligible. It was the same with TVs - Samsung, LG and Sony ruled.

Indigenous Micromax was the first to break into the exclusive handset club, entering the feature phones market in 2008 and the smartphone one in 2010. In the second quarter of 2013/14, it became the largest handset supplier in India, overtaking Samsung. Two more Indian companies, Karbonn and Lava, followed, selling in substantial numbers. And in the last two years, still more new brands have disrupted the market.

China's Gionee entered India in February 2013 and has sold four million devices so far. Xiaomi and OnePlus, both also from China, followed in July 2014 and December 2014, respectively, blazing similarly successful trails. "India contributed 7 per cent of our overall sales last year within just one month of starting operations and without any significant marketing or promotion activities," says Vikas Agarwal, General Manager - India, OnePlus. "The Indian market now accounts for about 20 per cent of our global sales and is our fastest growing. It is also among our top three markets worldwide."

Alongside the rookies, a veteran which had retired hurt also returned. Motorola Mobility's dwindling sales had led it to quit India in November 2012. It was back in February last year and has since sold three million smartphones.

The primary reason for the newcomers' success is competitive pricing, without compromising on the look of the device or its specifications. While Samsung Galaxy S5, for instance, was priced above Rs 50,000 (when launched early last year), OnePlus One, which has similar specifications, was priced at $299 when launched abroad. In India, it was launched for Rs 21,990 for the 64GB variant. Trust was built by the newcomers throug video reviews on YouTube with plenty of customer feedback. The Indian entrants first made their presence felt among handsets priced below Rs 10,000, but have since gained a market in the mid-segment (Rs 10,000 to Rs 25,000) too.

Among Chinese entrants, Xiaomi made a splash with its flash-sale strategy - offering a limited number of handsets from time to time, and that too only online. OnePlus, in turn, initially used the 'invite only' approach to stress exclusivity - it was available only to customers it sent invites to. While Xiaomi tied up with Flipkart for exclusive sales, OnePlus allied with Amazon India.

Following Xiaomi's success, Micromax - in partnership with operating system maker Cyanogen - launched a new brand YU in December 2014 which it sells only through flash sales on Amazon India. Motorola, too, prefers to sell its Moto series solely online, as does Chinese telecom equipment maker Huawei, which entered the Indian smartphone segment with its Honor brand.

Exclusive online distribution helps cut costs as the e-tailer can import the device directly from the company without paying commissions to distributors as brick-and-mortar outlets have to. But not all have opted for it. "The offline model has been very successful in driving our sales," says Arvind Vohra, Country CEO and Managing Director, Gionee India. "We only sell through our retail and channel partners. We are not selling directly through any e-commerce portal."

It is the same with TVs. While some of the established global players are reportedly contemplating quitting the business, indigenous ones such as Micromax, Mitashi and VU Technologies have aggressively entered the market with not merely LCD and LED TVs but also state-of-the-art Ultra HD TVs. Here, too, the price gap is substantial. For instance, Micromax's recently launched 49-inch UHD Android TV costs Rs 49,990 on Flipkart, as against the Rs 1 lakh price tag on 50-inch Samsung or Sony models.

The newcomers in the smartphone category have also moved into other devices. Xiaomi, for example, has the Mi Pad tablet, the Mi fitness band and the Yi action camera, all of which can be synced. Fitness bands, in particular, along with other kinds of wearable technology, are expected to see tremendous growth in coming years. The recent entrants are likely to make a dent in these segments as well, given the budget prices they are selling them at.