How much more brands can India’s handset market absorb?

A few years back, there were over 500 smartphone brands in Chinese mobile phone market, which reduced to 100 last year, with several smartphone makers shutting down their businesses because of fierce competition, low profits and unsettled debt.

India is the second largest mobile handset market after China, and is going to witness something similar. Worth $15 billion, it already has around 100 brands, that cater to the market selling some 220 million units of smartphone and feature phones per year.

Even though several brands have shut down, several others are getting ready to enter the market, including BeingSmart, backed by Bollywood actor Salman Khan. In addition, one-time leader Nokia is also ready to make a comeback.

Brands like LeEco, Miezu and Celkon have already withheld or withdrew their operations from India, giving in to the tough competition from brands like Gionee, Xiaomi, Oppo and Vivo.

Also read: Xiaomi brings in the Redmi 4A at Rs 5999

Brands that were leading the market once, like Micromax, have been sidelined as well.

As per industry experts, there are 200 companies in India, with 40-50 having a pan-India presence and the rest being local players. Manu Jain, managing director, Xiaomi India, said, "About eight years ago, the China smartphone market was similar to where India is now. The Chinese market has consolidated, with the top 6-7 players accounting for an 80% share. In India too, there will be consolidation."

This would require outright exits from several brands as well as mergers and acquisitions amongst others, which would be decided by the key players in the country. With several brands offering only smartphones and not feature phones despite India being world’s largest market for feature phone, it remains to be seen which trend is going to adjust itself to suit the market.

(Image source: Computer Weekly)