The phones, they are a-changin’

A number of Chinese brands are dominating the smartphone market in India

What is common between a young girl working as nanny in a large apartment complex in Bangalore, an IIM student who will soon be placed in a big consulting firm, and my car driver? All have Chinese mobile phones!

Chinese phones have grabbed four out of the five top slots in India’s smartphone segment, and the share of China-based vendors is as high as 46 per cent in the October-December 2016 quarter. Young Indians are leapfrogging the technology barrier and moving away from the practices of people like me, who have a desktop heritage.

India’s smartphone population is still only 300 million out of a possible 1 billion, even as it grows at an astonishing 23 per cent year on year. Markets like China’s are probably stagnant, which means one can expect even more obscure Chinese brands to enter the market in the coming months.

Can perceptions change?

‘Perception is reality’ is one of the oldest maxims we were reared on. If you were to ask people of my generation, many would have scant respect for China and its products. We may marvel at their growth, their tremendous discipline, their prowess in sports and even the speed at which their infrastructure has been built.

But when it comes to their quality, we have strong views and not necessarily positive ones. We swore by Japanese brands and their fantastic quality.

Marketers are well aware of this shortcoming, and if you notice the advertising for Chinese brands — some of which do well globally like Haier — they don’t seem particularly interested in talking about their country of origin. While German car manufacturers proudly announce their heritage (Volkswagen notwithstanding), the Chinese have been reticent.

And yet, things are changing in the mobile market in India, as Chinese brands continue to advertise heavily, have below-the-line activities and do extremely visible things like sponsoring the IPL.

Xiaomi, the Chinese smartphone maker, is setting up a second unit in India so it can produce a million phones per month. Clearly, ‘Chinese’ is no longer a dubious distinction — unless you are an Australian cricketer facing a left arm spinner!

Is consumer behaviour changing?

Coming back to the initial scenario I had depicted, all of them use one of the many widely advertised Chinese brands. While they may still use a phone primarily for calls and WhatsApp, they still want handsets that look good, don’t cost the earth and keep them going for the next 18 months.

Many years back, a common theory had prevailed in India, something I had spoken about extensively in my first book One Land, One Billion Minds. “India will patronise affordable quality at acceptable prices”. I had said that with conviction.

Are we seeing the same phenomenon carried forward to today’s young Indian with even more strength?

The increasing importance of the camera

There is no doubt that the current generation of mobile phone users are narcissists, even if it sounds uncomplimentary! And this is really where the Chinese brands do extraordinarily well, as they all have powerful cameras that tickle the fancy of a self-obsessed generation.

Some of these brands have very aggressive offers on the online channels, as the latest offer clearly demonstrates. Hardly surprising then, that these brands rapidly gain enormous ground.

Premium brands?

One of India’s characteristic feature is that Indians aspire for and admire brands like the iPhone and maybe even the Samsung Galaxy. But these companies will generally struggle when it comes to numbers and volumes. In the West, they have aggressive packages with the mobile phone companies, so consumers there don’t have to pay enormous sums of money upfront as we Indians do. 

The whole mobile market has moved up, in my view, from the Nokia 1100 to the Oppos and the Xiaomis. At this point in time, it seems that the Chinese firms are competing amongst themselves, even as the MotoGs of the world struggle with numbers and distribution.

The world’s hottest mobile market seems to be quite satisfied with its current lot of brands, even if some consumers are mildly sceptical about their quality or future.

The phones they are a changing!