Chinese smartphone vendors scoop 40% of Indian market

An attendee inspects the camera on a Xiaomi Corp Mi 5 smartphone during a launch event in New Delhi, India, March 31, 2016. [Photo/VCG]

Chinese smartphone vendors have captured about 40 percent of the market share in India, reported Beijing News on Tuesday citing latest industry survey.

Among all, Lenovo saw its shipment volume rise to the second only after Samsung in the third quarter last year, according to global research firm IDC.

Xiaomi took the third spot with a market share of 10.7 percent, whereas Chinese vendors collectively took up 40 percent, according to the survey across 30 major Indian cities.

The advance comes as India's domestic brands saw decline in market share. Micromax reported a 16.7 percent month-over-month sales drop in October, according to the IDC.

Analysts noted that as smarphone giants look at India, a country with a population of 1.34 billion, to be the "new China", the competition will be intense.

Despite growth, price war remains fierce in what is becoming the world's second-largest smartphone market where the price of a mobile averages only $100, said the IDC.

Lenovo has retained its duo-brand strategy in India, Rahul Agarwal, the company's managing director, told Beijing News, adding that Motorola is focused on high-end market, taking up a third of its sales, whereas Lenovo phones targeting lower end account for two thirds.

Indian customers are even more price sensitive than Chinese users, Ni Fei, co-founder and CEO of Nubia Technology, told media. According to data from the World Bank, China's average gross national income was four times of that of India in 2015.

Besides price war, patent rights and tariff could also hinder further growth in India, said analysts, citing patent disputes faced by Chinese smartphone makers OPPO, VIVO and Xiaomi in recent years.

OPPO is planning to invest 1.5 billion yuan ($215 million) to build an industrial park in India to bring down manufacturing cost, according to media reports earlier last month. The company already has a factory in Greater Noida.