Global brands growing on Indian roots

Faisal Kawoosa | Updated on November 19, 2020

Smart trend 150 million smartphones are sold in India every year   -  istock.com

The domestic smartphone market is dominated by global brands but their R&D and innovation are driven by Indians

The smartphone industry in India has witnessed exponential growth over the last few years. Indian smartphone users stood at 485 million as of 2019, as per techARC. While the smartphone base has remained stagnant, sales have been growing at a rate of 11-13 per cent mostly driven by the replacement market.

Adding to this, multiple other factors have led to the boom of smartphones and democratised mobile usage and penetration. These include the availability of smartphones within attractive price points, a vast network of sales channels, expansion of 4G/LTE networks by operators, and rising aspirations of the Indian consumers today.

Brands are also focussing on long-term commitments in India — not only for mobile sales but also for establishing manufacturing capacities. On the sales front, many asset-light brands, which were online-only, have been investing in offline exhibiting their long-term intent about the market. For manufacturing, they have set up plants, research and development centres and are increasingly focussing on the ever-evolving needs of the ‘global digital’ user today.

While there have been some positive developments, this year has also exposed us to one of the most unexpected, unseen, and unfortunate global pandemic, the aftermath of which cannot be determined in terms of economic and business impact. There is no playbook in this situation. The smartphone industry as well took a severe hit as manufacturing halted for almost two months, supply chains were affected, and so were the sales.

Irrespective of the origin, we cannot ignore the fact that the international ecosystem has played an extremely critical and vital role in earning India a leadership stature in smartphones globally. Over the past five years, the journey of international brands has ben propelled by investments of millions of dollars which is helping India in boosting manufacturing and innovation capabilities, creating employment opportunities and paving the way for exports in electronics.

At the same time, setting up localised R&D and manufacturing is leading to increasing localisation of products — which is not only driving ‘Make in India’ but also ‘Make for India.’

The Indian growth story is backed by foreign investments and the phenomenal support of the government to make India an attractive investment hub for ease of business and business opportunities. The FDI has nearly doubled in the last 10 years. About 10 per cent of India’s trade is with countries like China and when we consider China and Hong Kong together are our largest trading partners by far.

Chinese footprint

Since 2014, the smartphone industry with the foray of Chinese brands in the Indian market has almost doubled the market size. As against selling 80-90 million smartphones back then, today we are selling 150-155 million smartphones per year.

The most powerful story is the significant value creation being created out and should remain the key focus than being mired about the discussion around the source of origin of products and services. The fundamentals of global trade are based on this fact that people trade between countries primarily because of the strengths of supplying as well as consuming markets.

On the contribution of international mobile brands, one cannot forget the innovations made in specific areas. For example, the Operating System of a smartphone. While users may not consciously realise, it is a key technical product feature of today’s smartphones. The choice in OS, not only commits consumers to essential technical features but also has implications with regard to the user interface or availability of applications in the associated App Stores.

Localisation drive

Samsung and Nokia have pioneered the trend of localising the products and making the phones for India. Be it the famous flashlight torch feature in featurephones by Nokia or the bike mode in Samsung’s one of the best sold J-Series of smartphones, all these locally driven innovations have given a strong foothold to these global brands.

Among the recent ones, brands like OPPO leading the innovation story in smartphones today are equipped with charging technologies such as VOOC Flash Charge 4.0, which give hours of talk time in a five-minute charge, and well-suited for the trendsetting generation whose lives are fast-paced and always on the go.

According to techARC research fast or rapid charging is among the top three most sought after value-added features by consumers in smartphones. Perhaps, Apple also needs to think of India differently and have a made of India iPhone to gain acceptability beyond a certain user base.

Not only this, multiple brands have already launched 5G enabled devices in the country as well, while others are expected to launch more devices in the October-December quarter of 2020, which will have a good penetration of 5G smartphones by the time 5G is commercially available in India.

Indian contribution

The important thing to notice here is that despite brands having international origins, their contributions are legit, with Indian people, Indian representatives, the young Indian working minds, driving innovations at R&D centres in the country to bring forth the latest technologies.

India is now on a road to become the manufacturing hub of these brands, working in alignment with the government’s ‘Make in India’ initiative. The call to boycott Chinese brands or their products, the import restrictions, higher taxes will not hold back companies to do what is right for the consumer.

Brands like OPPO are continuing to launch new technologies and products that consumers desire. India holds the potential to become a manufacturing hub for the world, and political challenges and standoffs will only lead to a battered economy that affects us all collectively in a globalised era.

It won’t be wrong to say that aspiring for a strong international trade relationship between India and China is going to be beneficial for the people of India. It is only through a collective effort that we can achieve a common goal of recognising India as a manufacturing power on a global scale.

The writer is Founder, techARC

Published on November 19, 2020

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