Why have smartphone brands declined in India drastically?
The rise of Chinese brands, such as Xiaomi, Oppo, and Vivo, has exacerbated the decline of small brands due to their ability to offer superior smartphones at aggressive price points.
Over the past few years, the global smartphone market has witnessed a concerning trend: a steep decline in the number of active brands. According to the market research firm Counterpoint, the number of active smartphone brands dropped from over 700 in 2017 to around 250 in 2023. This decline signals an inevitable market consolidation that poses an existential threat to small and local brands.
Factors Driving the Decline
Several factors have contributed to the sharp decline in active smartphone brands worldwide. Firstly, the rise of Chinese brands such as Xiaomi, Oppo, and Vivo has accelerated this trend. These brands have rapidly gained market share across Asia, Europe, and Africa by offering feature-rich smartphones at aggressive prices. Insufficient R&D spending has also plagued many small and local brands, preventing them from keeping pace with innovations. Moreover, the maturing smartphone user base now demands better specifications, design, brand value, and ecosystem integration—areas where big brands excel. The COVID-19 pandemic and ensuing supply chain disruptions have further strained the operations of smaller brands. Industry headwinds like component shortages and slowing economies have compounded their woes.
Local Brands Hardest Hit
The decline has been particularly pronounced among local smartphone brands operating in the low and mid-price segments. Smaller brands, once referred to as “local kings” in markets like India, Bangladesh, Indonesia, and Africa, have lost tremendous ground over the past five years. These local brands struggle to compete with bigger brands in R&D, manufacturing capabilities, marketing budgets, and building robust sales networks. Their heavy reliance on white-label devices stands in stark contrast to the end-to-end control exercised by giants like Samsung, Apple, and Xiaomi.
Report by Counterpoint research states, “A maturing user base, improving device quality, longer replacement cycles, economic headwinds, supply-chain bottlenecks, and major technological transitions such as 4G to 5G have gradually whittled down the number of active brands and their volumes over the years. For example, local smartphone brands, once known as ‘local kings,’ like Micromax in India and Symphony in Bangladesh, have lost significant share or even exited over the last five years.”
Survival Strategies for Small Brands Smartphone
As large global brands continue to dominate, smaller smartphone makers will need nimble survival strategies. These include refocusing on niche customer segments, boosting R&D spending, forming partnerships to share costs, optimizing sales channels, and capitalizing on competitors’ weaknesses. Targeting the offline market in small towns and rural areas could also help weaker brands stay afloat. However, the long-term prognosis remains concerning without major innovations.
The smartphone market is a rapidly evolving and capital-intensive industry, and for brands to survive in this cutthroat industry, they have to innovate quickly and provide value for money. As product and brand differentiation narrows, users will gravitate toward larger brands with stronger ecosystem lock-ins. Large players also possess greater resilience to face macroeconomic adversities.
Please, also have a look into : China wants children not to use smartphones for more than two hours a day
