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  • Writer's pictureAjay Sharma

It’s A Game Of Snakes And Ladders. Will The Brands Once Ruling, See Themselves Sliding Down?

… or you may call it the game of fortune. The ones who’d hit the jackpot once may need to split their winnings with the newer ones.


This blog is focussed on what I feel is the possible outcome post the events of June 15th and 16th. Before I do that, let me first define how I categorize each brand for a better understanding of my blog.

Chinese Brands – Brands from China, manufacturing in China and/or exporting major components to India for assembling in India. #Xiaomi, #Oppo, #Vivo, #OnePlus and some smaller brands would fall in this category.

Global Brands – Brands from countries except China which have a global presence, and could be exporting to India or assembling in India. e.g. #Samsung, #Apple, #Asus, #Nokia.

Local Brands – Would be those Indian brands that are importing major components from China and assembling in India. This would include majorly #Micromax, #Intex, #Lava and #Karbonn.

If you do a check on any or all of these categories/brands, one thing is very clear – Majority of the components imported to manufacture mobile phones come from China. Why? Because China is the epicenter for the eco-system of mobile phones, and all brands whether Chinese, global or local, depend on it to manufacture or assemble phones. Making statements on banning sales of Chinese phones is therefore not an immediate solution unless we are okay to continue using our existing phones till such time that the ecosystem in India develops to a level where we can buy a 100% indigenous product. Well. That’s going to be a long wait.

However, I do understand the need of working towards reduced dependence on any country or brand.

My views on the possible scenario.

1. Chinese Brands

They have invested a lot in India, offering employment and business opportunities to many. Even the channel has major investments going. It would be best to leave it to the channel and/or customer to decide how they want to react. In the end, the customer is the king.

I am seeing and hearing that some of the customers are now shifting their brand preference with Samsung being the gainer. I can say this for parts of UP, Gujarat and Rajasthan from where I have received reports. A #Counterpoint report pegs the shift to non-Chinese brands as high as 40% based on a survey conducted by them. Another even higher. The feelings and the effects this time are indeed strong and may last longer if the issues between the two countries do not get sorted out amicably.

Some brands are trying to dilute the impact through highlighting things like “Made in India”, while some are qualifying themselves as an “Indian start-up”. While there are statements of no impact as of now or impact tapering off with time, this does not sound true to me based on the market feedback.

This opens up a world of opportunities for local and new brands from Europe/US as well. For the local brands specifically, it is a now or never situation.

The duration of the impact will depend on when the issue gets resolved. With supply shortages for most, it is best that they lie low for some time in terms of advertising. Even if they advertise, it should be more product-centric rather than through brand ambassadors. Oppo doing their launch through live streaming is an example of a low profile launch. Even tweets by hyper socially active leaders of two of the top 5 brands with followings in excess of 200-300k did not go down too well with the audience. Hence, the trolls!

If Chinese brands do take a hit, I feel Xiaomi stands to lose the most with #Realme positioning itself in the same segment as a “fresher brand” on one side and Samsung chipping Xiaomi customers on the other. I think the time to think and act differently for Xiaomi has come. They have done the same in the past too.

I would expect the overall contribution of Chinese brands to go down for sure with some share being taken by global and some by local. Not to forget new brands.

2. Global Brands

The global brands, especially Samsung which plays across different price segments and is in the top 3, will try and leverage the moment. They are an established brand with a strong brand image and can very well leverage being from “South Korea". With the brand having its biggest factory in India now, things have just become a lot easier for them. The latest report from #91Mobiles shows a shift of customers from Xiaomi to Samsung in their next purchase for the first time and this report is prior to June 16th. It can only increase after that.

Time for #LG also to relook their India strategy. If they want to be someone in the Indian Smartphone Industry, it is their smart moment. They were among the top 5 smartphone brands util 2010 and then they lost direction. They make good products, are in the top 10 globally and there is no reason for them not to make a substantial gain. If one has to see the presence of a consumer electronic brand in an Indian household, LG would not be far behind Samsung with its range of consumer electronic products. The brand is well known in India. What is missing in their smartphone business is focus. Of course the products, channel strategy, GTM needs some tweaking which should not be an issue.

Samsung’s presence in the price segment in which OnePlus plays, and the arrival of #AppleSE should push the market share of OnePlus down. However, the overall impact may not be too much as the contribution of this price segment is relatively small.

Apple, as I have always said, would have been a gainer over last year in any case. The present situation and the launch of the SE can only make them increase their volumes and market share.

I would not include #GooglePixel here till such time that they get their pricing right or have more products – at least one in the OnePlus price segment.

Nokia has been struggling in India, at least, in smartphones. A bit of distribution push with some price tweaking and they could gain.

HTC? Why not! They make good products and the brand name still holds strong in India.

With COVID-19 making a positive contribution to the gaming business, Asus can be a niche player with some reasonable volumes.

3. Local Brands

Local or the MILK brands especially Micromax as “ Once upon a time challenger” brand and Lava as a “system driven and channel-friendly” brand, do stand a fair chance as well. I am sure they know what is best suited for them. They can make a reasonable comeback if they play it right. After all, they do have a connect with the channel and the customers with their feature phones.

As of now Micromax, Lava and Karbonn have shown their intention to make a comeback. What market share can these three occupy is not known as of now as the launches may be some time away and time can change a lot of things. However, one thing is for sure. The share of Indian brands can only grow with the existing combined share being just around 2%.

How about #Jio getting into the device market now directly or by taking over one of the Indian brands. They do have a strong Indian brand image, have sold volumes of their 4G Feature Phones, are the No. 1 operator today and, most importantly, have the money power to take on any brand. Can 2020 set the stage for a Jio moment?

New Brands

If a new brand from Europe or the US of A wants to make an entry in India, the timing couldn’t be better. Yes, I have a few brands in mind. 😊

To summarise:

1. Chinese brands stand to lose. How much would depend on how long does the stand-off last.

2. Samsung to be the major gainer.

3. Indian brands to gain. From brand perspective, the growth should be good as their current sales levels are too low. If my memory serves me right their combined share in 2019 was around 1%. How much growth will depend on the product looks, quality, service and channel engagement. Micromax could be better in product quality, Lava would be better in service and channel management.

4. Losses of Chinese brands could also lead to some share realignments within the Chinese brands with Realme gaining.

5. The most exposed brand would be Xiaomi which will get boxed between Samsung on one side and the BBK brands on the other.

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