Why are Companies focusing on Manufacturing Phones in India?


We explore a few reasons as to why India has become a smartphone manufacturing hub. The Indian smartphone market has become a battleground for mobile phone brands, as more than a dozen brands compete with one another in the Indian mobile bazaar. India is the second largest mobile market in the world, with the industry seeing double digit growth year on year. Furthermore, it sees a lot of sales during the festive season — both online and offline.

Why are Companies focusing on Manufacturing Phones in India?

As per the Quarterly Mobile Phone Tracker of the International Data Corporation’s (IDC), in 2019, the Indian smartphone market had the highest ever seen shipment in the second quarter, which amounted to 36.9 million units. 

The import of smartphones saw a jump of 7.6 per cent with 69.3 million units being shipped to the country. The period also saw a year on year growth of 9.9 per cent, and quarter on quarter growth of 14.8 per cent. 

Below are some of the factors that contribute to companies invading the market aggressively?

Entry of Chinese brands

A lot of Chinese brands have entered the market, and have become favorites with consumers over the last four years. Some of them include Xiaomi, Vivo, OnePlus, and Oppo. A few Chinese brands have failed as well, such as, ZTE, Meizu, Coolpad and LeEco. During this time, some popular brands such as HTC and Sony disappeared from the market.

At the same time, brands such as Realme have been gaining foothold. The competition is so tough that companies such as Micromax, which was once popular, and captured a market share of around 18 percent now, have their share reduced to a meagre 5 percent. 

Xiaomi, one of the best-selling mobile brands, has been giving tough competition even to market leaders such as Samsung, which had a 34 percent share a few years ago, but has now been usurped. This fierce battle has made it difficult for entrants to make a mark and sustain themselves. 

The age of digitization

New launches and strong promotions are further intensifying the competition, and adding to that is the problem of constant digitization. Mobile handsets see frequent updates and Indian mobile brands such as Reliance Jio offer features like 5G connectivity which promote the concept of digitization.

Jio has been promoting and pushing 4G and 5G connectivity, and offering their own range of phones as well. This has pushed out smartphones offering simply 2G or 3G connectivity.

Online channels

While offline channels are still relevant, a lot of growth has been driven through online channels, with multiple players coming in and offering crazy discounts. E-commerce platforms such as Flipkart, Amazon, and Paytm have been instrumental in driving a lot of sales for smartphones.

Brands such as OnePlus, Xiaomi and Realme among others are offering multiple discounts, schemes and offers through their websites. At the same time, offline channels have been registering a growth of 8.8% with the launch of a new range of smartphones.

The fastest growing markets for smartphones in India are Bhopal, Gurgaon and Jaipur. Delhi and Mumbai have also been contributing to this growth. 

Growing investments

Almost 95 companies have their manufacturing units in India because of the ‘Make in India’ initiative, making it a prominent destination for mobile manufacturing. Within a short period of time, over 100 million phones have been manufactured in the country.

A lot of companies have chosen Noida as their preferred location; this makes the city a hub of smartphone manufacturing. There are a lot of electronic manufacturing services that have come into the picture, as there is a massive opportunity to make money.

These are global manufacturing giants such as Jabil, Flextronics, and Foxconn amongst others. Taking into account all these factors, the industry has attracted an investment of over half a billion dollars, contributing to the country’s economy. 

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In Conclusion we can say that the Indian smartphone market continues to thrive, with numerous domestic and international players locked in intense competition for market dominance. As India is one of the fastest growing smartphone markets in the world, with more than 50 crore Indians using a smartphone, with the number expected to double over the next few years, Indian mobile brands are poised to lead from the front. Furthermore, with consumers now opting to purchase domestic products over those manufactured outside the country, Indian smartphone brands such as Micromax, Lava, Intex and Karbonn will now back themselves to capture a significant portion of the market share.

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