Eight years since their foray into India, top Chinese smartphone brands are too deeply entrenched in the world’s second largest market to see any significant impact on their businesses despite intense government scrutiny, said market trackers.
While the lack of alternatives – four Chinese brands are in the top five with an 80% share – is likely to largely protect their market position, any financial restrictions cutting their operating expenses could create short-term problems. These Chinese brands though realise that India is too important for them to exit, especially after having invested top dollars in manufacturing, distribution and retail networks, and research, experts added.
“The dependency on the Chinese brands from both a consumer and trade point of view is also too high, and the government cannot be seen creating a vacuum right now, in terms of jobs, trade and other things,” said Navkendar Singh, research director at IDC India.
He added there is unlikely to be any impact on their market shares, unless “there are some restrictions in terms of finances put by the government”.
The heat though is on Chinese entities in India amid the continuing border tussle with China. Various Indian law enforcement agencies have been scrutinizing their operations and finances. Huawei and ZTE have almost been forced out of the telecom network gear supply market, while hundreds of Chinese apps, including popular social media apps like Tik-Tok and games like PUBG Mobile, were banned in the past two years.
The focus is now on Chinese handsets makers with market leader Xiaomi, second-ranked Vivo and fifth-ranked Oppo facing varying charges – from money-laundering to customs duty evasion – and their senior executives have faced interrogation. Some of these matters are in various courts. There are reports that the actions have forced several Chinese expats working in these companies to leave India.
