It is a posture of Chinese mobile phones to "rule" the Indian market.
No, according to the relevant data released by the international data company IDC, in the second quarter of this year, the four major Chinese first-tier brands, Huawei, Xiaomi, OPPO, and vivo, accounted for 54.9% of the Indian market share, achieving high-, middle- and low-end price points. "Eat", Chinese mobile phone brands dominate the Indian market, it seems "victory is in sight."
Indeed, as the second largest smartphone market, India has always been the target of various brands. Domestic first-tier brands regard it as an area for expansion in overseas markets, and second-tier brands are hoping to get a share of the pie and find themselves in overseas markets. According to a related report released by CMR, in the first half of this year, OnePlus had a 25% market share in India, ranking second; on July 30, Realme, the second brand independently operated by OPPO after OnePlus, also officially debuted. Other second-tier brands are also about to move...
Why the Indian market has become a battlefield for second-tier mobile phones
In fact, the rise of OnePlus is a fuze that ignited the enthusiasm of second-tier brand phones, and gradually, the Indian market has become the main battlefield of second-tier phones. In the view of Xiaoxiang Finance, there are mainly these reasons.
1. The domestic industry has overheated competition, and the second-line mobile phones that survive in the cracks have to find another way out
In recent years, the top five first-tier brands have developed steadily in China, dominating most of the domestic mobile phone market. According to relevant data, in the past three years, Huawei, OPPO, vivo, Xiaomi and Apple have been among the top five mobile phone sales in China. In the first quarter of 2018, they accounted for 84% of total sales. In 2017, this proportion was 77%. This data is still 67% for the year. Overall, in the domestic mobile phone market, the top five first-tier mobile phone manufacturers occupy an increasing market share, and the market concentration is getting higher and higher. Therefore, for brands that have not grown up in recent years, they have missed the best opportunity to break through. In November last year, Lei Jun, the founder and chairman of Xiaomi, said, "The Chinese mobile phone market has basically matured in the past two years, and the four of us (Huawei, Xiaomi, OPPO, vivo) and Apple, no one else." This statement is being fulfilled. . According to related reports, in August last year, Coolpad announced that the company was continuing to lose money and had to terminate hundreds of school recruits. The company’s CEO Liu Jiangfeng also officially announced his resignation. This year, Gionee’s mobile phones have been deteriorating. In addition to a large backlog of inventories and serious debts, It has also been reported that it is going to close down several times; according to the Beijing News, Meizu has laid off its employees for the third consecutive year. At a time when the domestic mobile phone market is in full swing, second-tier mobile phone brands such as Meizu, Coolpad, and Gionee still need to increase revenue and reduce expenditure to survive. The fate of the remaining third- and fourth-tier mobile phone brands can be imagined, but any mistake can be self-explanatory. Break the back road.
2. After going to sea for trials, India is regarded as the most potential market by domestic mobile phone manufacturers
With the Matthew effect still intensifying in the domestic mobile phone market, second-tier brands can only linger in the ever-shrinking market space. In order to find new footholds, first- and second-tier mobile phone manufacturers have moved their rudders to the Indian market. Xiaoxiang Finance believes There are several reasons for this.
On the one hand, Indian consumers have a large demand for intelligence. According to relevant data, as of May last year, the total number of users in the Indian mobile phone market reached 1.181 billion. However, the current penetration rate of smart phones in India is 22%, less than one-third of China, and less than the global average. Half of it. For mobile phone manufacturers, the Indian market is undoubtedly very promising. In addition, according to publicly available data, the annual shipments of the Indian mobile phone market last year were less than 300 million, while China stabilized at around 500 million, of which there was a shipment gap of nearly 200 million units. It is understood that there are only 87 mobile phones per 100 people in India. There is a lot of room for improvement, which provides opportunities for Chinese manufacturers.
On the other hand, India's local mobile phone manufacturers are weak and the market structure has not yet formed. It is understood that two years ago, Indian local brands Micromax and Karbonn Mobiles accounted for more than 54% of the Indian mobile phone market, which is considered to have considerable weight. However, most of the products they sell are relatively primitive feature phones, with high network charges, users need to switch SIM to use the Internet function and other defects, and most of them rely on selling low-priced mobile phones to maintain a certain shipment volume, mainly in rural areas Point of sale. Therefore, Chinese mobile phone brands with high cost performance and rich product types are undoubtedly more attractive to consumers. According to relevant data, as of 2017, only 90% of smartphones shipped in India are equipped with dual-SIM dual-standby functions, while almost all Chinese mobile phones have this function and support 4G networks. This is not yet fully popularized for 3G. For India, it can be said to be a heavy hammer.
Therefore, in addition to first-tier brands such as Xiaomi, domestic second-tier brands have already invaded and used India as the long-term main battlefield. It is reported that Gionee entered the Indian market as early as 2012. In April of this year, Gionee held another media tasting meeting for new product launches; Coolpad officials announced that its new product named Cool Play 6 will soon be launched in India; Meizu's new product this year Charm Blue Note 2 will also be launched in India in August; not long ago, OPPO's sub-brand RealMe has reached a cooperation with Amazon; in addition, OnePlus will continue to expand its retail store business in India, planning to be in India in the second half of 2018 Owns 10 retail stores.
Second-line mobile phones are in a sluggish state, and the road to dreams is getting harder
Second-tier brands have joined the Indian battlefield again and again, hoping to stand up in the Indian market, but in fact, this road to realize their dreams is not easy. In June this year, relevant Indian media reported that Karbonn Mobile, a local Indian mobile phone brand, had acquired Gionee. The ending of Gionee has already hinted that the future of other entrants will not be easy to fight against, and the Indian market will not become the savior of second-tier mobile phones. Xiaoxiang Finance
In fact, the brand effect will work both at home and abroad. With strong capital support, first-line brands can carry out large-scale product promotion and localized product research and development to attract consumers' attention. Therefore, when the word-of-mouth effect shows a highly centralized trend, the first-line brand camp expands, and the growth space of the second- and third-line brands is squeezed, forming a "T" pattern conclusion. The end is the accelerated formation of the Matthew effect in the mobile phone market in the Indian market. Second-tier brands can only be caught with nothing.
Take Gionee mobile phones as an example. In 2013, Gionee mobile phones were slightly in good condition among Indian consumer groups, with a market share of 5%. However, good luck did not last long. With the outstanding performance of Xiaomi, Huawei, and blue-green mobile phones in the Indian market, consumers lost their willingness to buy from Gionee, and sales continued to decline, and Gionee mobile phones could no longer stand firm. heel.
2. Marketing costs are getting higher and higher, and second-tier brands cannot bear the burden even in India
Although there is a large number of consumer demands in the Indian mobile phone market, it still has to pay a high cost to seize this piece of cake, and the market expenses of retail and e-commerce can make second-tier manufacturers "die on exhaustion".
According to relevant media reports, the cost of local retail in India is very high, and commercial real estate prices are extremely high, resulting in a very limited number of local shopping malls and chain stores. In 2017, the average price of houses in India's commercial circles reached 50,000 per square meter, while the local per capita wages were mostly only 20,000 per year. However, in the face of such marketing costs, first-line brands did not shrink back. It is understood that during the development of vivo, many supporting service centers have been set up in small towns and rural areas around India. According to related reports, in 2015, OPPO and vivo invested up to approximately RMB 2.36 billion in marketing expenses in India, and paid retailers in advance for 1-2 years of billboard and marketing expenses, and even paid Retailers and salesmen provide 5% to 10% profits.
In fact, second-tier brands such as Gionee have also worked hard in the Indian market. It is understood that in 2016, Gionee spent 200 million rupees as brand marketing expenses during Diwali in India. However, manufacturers without a strong backing to carry out large-scale capital investment will only die in blood loss.
As a result, e-commerce has become the second best choice for the second-gradient mobile phone brand. But there is no doubt that the cost of developing e-commerce in India is also high. On the one hand, it is not extremely difficult to establish a brand-specific e-commerce website. Most of the infrastructure in India is not perfect. It is very difficult for brand owners to establish a complete supply chain alone. However, cooperation with e-commerce platforms will face problems such as storage space, transportation equipment, infrastructure construction and maintenance. On the other hand, payment and logistics costs are also a problem. Indian users are mostly accustomed to cash payment and cash-on-delivery purchase methods, making sellers have to bear the risks in the cash collection process, and they must also bear the return costs if the customer refuses to accept the goods. .
3. Localization capabilities have become a major weakness for second-tier brands
It takes a lot of thought for products to meet the appetite of local Indians. For this reason, first-tier manufacturers have carried out "large-scale" localized product development and large-scale advertising, which is a height that is difficult for second-tier manufacturers.
Take Xiaomi as an example. In order to meet the needs of Indian mobile phone users, Xiaomi has designed a unique Indian version of the operating system and added functions such as the Indian Railway Card. In order to optimize the use effect, it has specially made a mobile phone charger and coating that adapt to the local climate, and In order to meet the needs of Indian users to watch mobile phone video, the card slot "2+1", that is, the structure of two communication cards and one storage card, is designed.
In addition, the advertising campaign of Chinese mobile phone manufacturers continues to India. In 2015, in order to cater to Indian mobile phone users’ habit of obtaining information through newspapers, Xiaomi spent more than $300,000 to buy the front page of India’s oldest English-language newspaper "The Times of India" for advertising. At the beginning of this year, OPPO Competing with vivo for the sponsorship of the Indian national cricket team, he threw 1.1 billion yuan, which is said to be five times the previous amount. Previously, vivo titled the Indian Cricket League in 2016 and 2017, as well as numerous entertainment programs.
On the other hand, second-tier brands such as Gionee and Meizu have encountered capital chain problems. Not long ago, the rumored Gionee invested 6 billion in advertising expenses in star entertainment marketing, which brought down Gionee. We don’t know the actual cost of the channel. However, capital constraints are indeed a major pain point in the process of market expansion for the second-tier brands.
4. It won't work if you copy the Chinese style of play to India
In fact, not all companies can get a good response in India, and they cannot attract users without technology, services and bright spots. China's first-tier mobile phone manufacturers can have such a rapid development speed in India to crush the second-tier manufacturers, in addition to investing a lot of capital to localize their products, product positioning and channel strategies are equally important.
OPPO is an example of successful transformation. When OPPO first entered the Indian market, it copied Chinese products, and the feedback was not good. Later, it made great efforts to study the needs of the Indian market, investigate the demand pain points and preferences of young consumers, and finally successfully found an entry point for its fast charging, selfies, and full-screen special-shaped screens. And other special features, combined with vigorous advertising, successfully captured the appetite of users.
The performance of Gionee in the Indian market is not satisfactory. The long battery life of the Gionee M series shows that Gionee has been working hard on UI and business functions. However, Gionee mobile phones have not been online for features such as dual cameras, large screens, full screens, and face recognition that can attract young people. Moreover, when manufacturers such as OPPO, vivo, and Huawei are adopting "orphan" marketing by reducing product categories, Gionee has introduced a variety of products into the eyes of Indian consumers, dazzling consumers, which affects to a certain extent The consumer experience.
in conclusion
Not all second-tier brands can become OnePlus. Today when technology and innovation are lacking, the old tunes are often unreliable. The struggle of first- and second-tier mobile phone brands in the Indian market has almost come to an end. Product positioning and marketing strategies are short. The board cannot be compensated by the huge demand in the Indian market.
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