The news of the Indian government preparing to suspend Chinese OEMs like Xiaomi, Realme, Transsion and Oppo from selling budget-oriented phones under ₹12,000 has caused quite a stir in the local smartphone markets throughout the country. While some shopkeepers are worried about their profit margins and discourage the potential move, some are ready to comply with the government if the speculation does manifest into fruition. Now, what repercussions this could have for consumers, retailers and the thousands of employees working for Chinese brands is still up for debate.
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The average Indian smartphone buyer demands that they get maximum value for money when it comes to the budget smartphone market. The seeds of this approach were planted way back in 2014, when Xiaomi entered the Indian market. Not only did they offer better specifications for the money, but they also made the consumer get a taste of premium hardware for one-third the cost. Indian brands like Micromax, Lava and Intex had no answer to the disruptive strategies used by their Chinese counterparts. When 4G was launched in the country, only Chinese brands were facilitating access to 4G hardware in the budget category. This was the proverbial nail in the coffin for the Indian brands.
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According to Counterpoint, Xiaomi, Oppo, Vivo, and Realme occupied 63% of the Indian smartphone market share as of Q1 2022. Now, while this does not account for all the budget smartphones under ₹12,000, the message dispersed is loud and clear that a developing economy allows for investment opportunities but cuts you off when you start thriving.
Here is what local retailer, Sunny Electronics in Jaipur had to say on this: “Indian manufacturers like Lava, Micromax and Intex will benefit highly through this move, but initially, the Chinese brand came to disrupt the Indian market by offering great products and that is why the Indian brands declined in popularity over time. While I appreciate the move, I feel that consumers looking for phones under ₹12,000 will face a difficult time buying good phones that aren’t Chinese. Also, it will indeed feel great when our own brands contribute to the economy, but I must emphasize that Indian brands should not use foreign-made phone parts, only to assemble them in India.”
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Upon further digging, some smaller retailers were unhappy about the potential move as they fear that their profits might plummet considering the fact that they only sell budget Chinese phones. Simply put, common sentiments are mixed. For the greater good of the nation, potential moves like this are welcome, but they should not come at the cost of consumer dissatisfaction.
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