NEW DELHI: Coolpad, Meizu and Phi-Comm are three popular Chinese smartphone brands that forayed into the hot Indian smartphone market in less than a month. All three would do well to keep in mind the fate of their better known and larger global peers — Huawei, ZTE and Korea's LG — while trying to make a mark in the surging and intensely competitive market.

Huawei, ZTE and LG, which are all box-office hits globally and ranked in the top 10 by Gartner, have turned out to be duds so far in India — one of the largest and most sought after smartphone markets in the world.

Huawei, the world's fourth-largest smartphone vendor, imported 163,000 mobile phones in the October-December 2014 quarter, about a fourth of what Karbonn Mobiles shipped in, according to data by Cybex Exim Solutions. In the same period, No. 3 smartphone brand Intex imported about 1.7 million units, about 10 times Huawei's shipments. Karbonn and Intex aren't even the top two vendors in India, which is dominated by Samsung and Micromax.

The case for LG — the world's fifthlargest player — is similar. The South Korean consumer goods and home appliances maker imported 79,000 smartphones in the October-December quarter, a quantity that dwindled to 27,000 units in January-March. LG imported 519,000 units in 2014, less than Karbonn's fourth-quarter 2014 purchases.

The Korean company said it was strengthening its mobile business in India. "As a strategy, we are focusing on smartphones and there is an impressive growth in 2014," an LG spokesman said, adding that it plans to launch 20-22 handset models, including the G4, this year.

Huawei and ZTE didn't respond to queries.

"Brands like ZTE, Huawei and LG made a kind of half-hearted effort to get into the market, while Xiaomi and Meizu are more vibrant and energetic brands in terms of approach — at least that is what they have been able to position themselves as," said Faisal Kawoosa, lead analyst at CMR Telecoms Practice. He was referring to the limited marketing strategies adopted by the companies, when compared to Indian rivals, which spend a significant portion of their revenue on promotional campaigns.

Sector experts added that these companies didn't effectively communicate to Indian consumers when they came into the market with smartphones two to three years ago.

"All these brands missed out on saying that we're big globally and now we're available in India. Instead, they did a me-too," said Karan Thakkar, senior market analyst at International Data Corporation India.

He compared the brands to their nemesis Xiaomi, which communicated its huge presence in China while announcing its India launch, but kept it to a limited audience.

"This created curiosity about Xiaomi, which was reflected in the positive mentions on social media even before the brand entered India," Thakkar added. Less than a year since its July 2014 entry into India, Xiaomi is already No. 5 in smartphone rankings, mirroring its success in its home market of China.
Analysts also point to the inherently different nature of the Indian market, where devices and data or voice plans are sold separately and not clubbed together, as in other countries. Besides, consumers are hesitant about buying Chinese-branded mobile phones, a trend that only Xiaomi appears to have bucked.

"Huawei, ZTE and Lenovo needed affordable flagships in their portfolio to change the perception but they skewed their portfolio to entry-level smartphones and no flagships in the affordable premium segment, which is where local handset brands dominated with their competitive prices," said Hong-Kong based Counterpoint Research's senior analyst Tarun Pathak.

Experts also underline the growth of online retail, which has become the base for multiple mobile brand launches, including sold out stocks of Xiaomi, and more recently, Meizu.

The online-driven success of Xiaomi and Motorola, has prompted the older rivals to come out with exclusive online brands in India - Honor, in the case of Huawei, and the just-launched Nubia, in the case of ZTE. LG still doesn't have an online-only brand.

Source:- articles.economictimes.indiatimes.com