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HTC Exits Smartphone Market in India

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Taiwan based consumer electronics company HTC Corporation has reportedly exited the smartphone business in India. Over the last few years, HTC has been struggling to keep up its market share in the smartphone segment in the country. Stiff competition in the market, distribution challenges and pricing pressures were the key issues that plagued HTC, forcing its exit from the Indian market.

The smartphone segment in India is highly competitive, characterised by the entry and exit of several players every year in the market. Currently, it is the Chinese manufacturers who rule the roost with brands Xiaomi, Vivo, Lenovo and Oppo featuring in the top five selling brands in terms of volume in 2018. OnePlus and Huawei have been successful in generating quite a buzz in the industry fast creating a substantial consumer base for their smartphone product offerings. Affordable pricing, a wide range of products incorporating the latest features coupled with aggressive marketing campaigns and promotion by Chinese players have helped them capture a significant share of the Indian smartphone sales.

Xiaomi Technology India Pvt Ltd now stands as the leading player in terms of volume sales taking over the leadership position from Samsung India Electronics Pvt Ltd. The rapidly increasing market share of Chinese brands and fierce competition has adversely impacted the performance of domestic smartphone brands such as Micromax, Lava and Karbonn. According to Euromonitor International’s data, collectively, these three companies have been experiencing double-digit de-growth over the last two years. However, it is not just the domestic players, but sales of International players have been impacted as well.

The news of the departure of HTC from the smartphone market in India signals at a shift in the wider market dynamics. In a market so competitive, it has become quite important for players operating in the market to create a loyal consumer base for their products. In my opinion, the key factors responsible for the success of a brand in the Indian smartphone market are:

  • Staying relevant by incorporating the latest features and technology through innovation
  • Building a strong brand by capturing the right consumer perception
  • Tighter supply chain ecosystem with healthy relationships with key stakeholders involved
  • Strong presence across major retailing channels and extensive consumer awareness
  • The most important of all, getting the pricing right by being perceived as a value for money product

In a market so dynamic and unpredictable, it is interesting to look forward to what the future holds for the smartphone players in the country. Take a look at Euromonitor's Mobile Phones in India Country Report to learn more.

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