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Samsung topples: Locals take over Indian & Chinese mobile market

Contrary to its literary meaning in Chinese – which means ‘little rice’, Xiaomi certainly seems to have achieved large feats within a short span of time. Xiaomi Corp. has overtaken the global giant Samsung Electronics Co. to become the largest smartphone vendor in China in Q2 2014. This is a giant leap for this four-year old company, considering the fact that mainland China is the largest smartphone market in the world; accounting for 37 per cent of global shipments in Q2 2014, according to a Canalys report.

According to the Canalys report, Xiaomi Corp., also known as the Apple of China, captured 14 per cent share in China, backed by 240 per cent year-on-year growth. Xiaomi, along with Lenovo, Yulong, Huawei, BBK, ZTE, OPPO and K-Touch – the eight Chinese vendors in the top 10, accounted for about 65 per cent market share. Apple and Samsung were the only two international vendors that made it to the top 10. Samsung slipped to second place in China for the first time since Q4 2011 accounting for a 15 per cent year-on-year decline.

Even in India, Samsung was dethroned as the country’s topmost cellphone manufacturer by another local rival, Micromax Informatics Ltd, according to a report released by Counterpoint Technology Market Research. According to Neil Shah, Research Director, Devices & Ecosystems, Counterpoint Technology Market Research, “Samsung is suffering from portfolio and design fatigue with the handset S5 – the halo device, that didn’t live up to the expectations. Also, the attack from competing brands such as Motorola, through e-commerce channels, hurt Samsung’s mid-to-low tier volumes, which helped Micromax pip Samsung in terms of overall volumes.”

Micromax became India’s leading mobile phone supplier brand in Q2 2014 by surpassing Samsung. This five-year old company captured a market share of 17 per cent as compared to the 13 per cent in Q1 2014. The report also claims that Micromax earned the top spot in the feature phone segment as well, taking over Nokia for the first time, during the April-June quarter 2014. “The recent market share gains for Micromax have been at the expense of Samsung’s shift in focus away from feature phones and plateauing smartphone demand,” stated Mr Shah.

According to him, the key reasons why Micromax has evolved as the top player are:

  • Over the last five years, Micromax has heavily invested in building its brand through significant TV ads, print ads, sponsorships and roping in big brand ambassadors such as Hugh Jackman.
  • It has also, in parallel, build deeper distribution networks which spans from urban to rural India helping it to penetrate further into mobile handset market closer to Samsung and Nokia.
  • Broader handset portfolio with growing differentiators in terms of localising the handsets.

Samsung, however, retained its top spot in the smartphone segment in India. It captured a market share of 25.3 per cent in terms of shipment, as compared to Micromax’s 19.1 per cent share.

On a global scale, Xiaomi is claimed to be the fifth largest smartphone manufacturer in world, in Q2 2014, according to a report by Strategic Analytics. The report claims that Xiaomi Corp. outdid LG Electronics Inc. to claim the fifth spot and has a global market share of five per cent. Globally, Samsung retained the top spot, however, its market share dipped from 33 per cent in Q2 2013 to 25 per cent in Q2 2014.

The Strategy Analytics report also claims that the global shipment of smartphones witnessed a 27 per cent annual growth, shipping 295 million units in the second quarter of 2014, as compared to the 233 million shipped in Q2 2013. However, Samsung turned out to be the only major manufacturer that witnessed a decline in the shipment. It shipped 74.5 million units in Q2 2014, as compared to the 76 million units shipped in Q2 2013.


Canalys 2


Rahul Raj

Rahul is the Senior Correspondent for Digital Market Asia. He is a young journalist with a passion for photography.