In 2022, a number of Chinese mobile phone brands suffered setbacks in India. Xiaomi was seized for CNY 5 billion by the Indian Law Enforcement Bureau. Brand manufacturers such as Huawei (华为), vivo, ZTE (中兴), and OPPO were also raided by the Indian local tax bureau and other departments, and some company executives were summoned for investigation. This greatly affects electronics ecology going overseas in India.
According to Indian media reports, the Indian government has asked Chinese smartphone makers such as Xiaomi (小米), OPPO, realme, and vivo to appoint Indian nationals to positions such as CEO, Chief Operations Officer, Chief Financial Officer, and Chief Technology Officer. In addition, the Indian government has instructed them to delegate contract manufacturing to Indian companies, as well as set up joint ventures to improve local manufacturing to the level of components. Government officials have also specifically instructed Chinese companies to abide by the law and not evade taxes in India, the report said.
India is currently the second-largest smartphone market in the world and the fastest-growing smartphone market in the world. But according to the latest report released by market research firm Canalys, the Indian smartphone market has had a difficult start in 2023, with Quarter 1 shipments down 20% year-on-year.
According to the agency's data, in 2023 Quarter 1, Samsung in the Indian market ranked first, with a market share of 21% and shipments of 6.30 million; OPPO ranked second, with a market share of 18% and shipments of 5.50 million; vivo ranked third, with a market share of nearly 18% and shipments 5.40 million; Xiaomi slipped to fourth, with a market share of 16% and shipments of 5 million; realme ranked fifth, with a market share of 9% and shipments of 2.90 million, and its online sales remained sluggish.
Chinese mobile phone companies are currently facing fierce competition in India. Indian local mobile phones perform well in the feature phone market and have a broad user base in second- and third-tier cities in India. But in the field of smartphones, local mobile phones are weaker. According to Statistical Data from Counterpoint Research, only 300 million to 400 million users in India are using smartphones now, and the demand for replacement is very strong. Not only are Chinese mobile phone companies targeting the Indian market, but Samsung and Apple are also both strong competitors. Samsung and Apple mainly focus on the mid-to-high-end smartphone market in India, while a series of Chinese mobile phone companies such as Xiaomi focus on low-end products. As India's middle class continues to grow, high-end brands such as Apple and Samsung face a favorable situation.
The Indian government's request this time is a response to the national strategy of "Make in India". However, excessive requirements will also lead to the inability of companies to operate in full compliance, and will also largely limit the development of brands in India.
India is one of the most populous countries in the world, with a population of more than 1.40 billion and huge market potential. According to the latest report from Canalys, although India's Quarter 1 shipments in 2023 fell by 20% year-on-year, the export value of smartphones in the same period hit a record high of nearly USD 4 billion. Therefore, it is expected that the Indian smartphone market will recover after getting rid of impact factors such as the epidemic in the future.