Sport gives Chinese manufacturers a boost in market
"It's an invasion of Chinese brands," an Indian cricket administrator is reported to have remarked last week after Oppo, a Chinese smartphone maker, shelled out $162 million to sponsor India's national cricket teams for the next five years.
While the comment may have been in jest, it would be a telling reference to Oppo outbidding Vivo, another Chinese phonemaker, thus joining labels such as Coca-Cola, Pepsi, Star TV and Hyundai, all past sponsors of the teams.
Counterpoint Research said Chinese brands grabbed four of the top five spots in market share in the last quarter of 2016.
The price-sensitive nation of 1.34 billion has an estimated 240 to 300 million smartphone users who bought 120 million units last year, which are estimated to have generated $15 billion to $20 billion in sales revenue.
Its large middle class, estimated at 300 to 400 million, craves internet access via the latest smartphones.
Reports say around 500 million smartphones may be bought in the next few years as the country embraces a cashless economy. The annual sales figure is forecast to reach 240 million units by 2020.
Chinese brands are now itching to eject Samsung from the summit and also battling Indian, South Korean, Japanese and US brands, said Nicole Peng, research director at global consultancy Canalys.
The Chinese offensive began a few years back. Huawei and Gionee sponsored two Indian Premier League cricket franchises. Xiaomi also had smash hits with online flash sales－in which buyers are lured to heavily discounted sales.
In July 2015, Alibaba-backed PayTM, an online payments company, clinched a deal for over $31 million through 2019 to sponsor titles for all official domestic and international cricket matches played in India.
Three months later, Vivo was reported to have spent as much as $23 million to sponsor the Indian Premier League title for just two years, 2016 and 2017. The IPL is the most popular franchise-based cricket tournament in the game's shortest format and commands a global TV and online audience of more than 1 billion.
Next, Chinese brands such as OnePlus, Motorola (owned by Lenovo), LeEco, ZTE and CoolPad joined the gold rush.
Affordable, feature-loaded, nifty Chinese smartphone models materialized in various price bands, from as low as 3,000 rupees to 30,000 rupees ($45.80 to $458).
In an online straw poll conducted by China Daily this month, a majority of Indian consumers agreed with this statement: "Chinese brands have flooded/captured the Indian market."
The reasons for that might be found in a Pew Research report released last week. While smartphone ownership in China jumped 31 percentage points since 2013, in India it has increased by only 6 points, suggesting a great deal of room for future growth.
Signs to that effect emerged last year when India surpassed the United States as the second-largest global smartphone market in terms of users. Smartphone shipments from factories to sellers grew by a healthy 18 percent in India last year, compared with a modest 3 percent globally and 6 percent in China, according to Counterpoint data.
At the same time, global smartphone sales to users grew by just 7 percent last year to 1.5 billion units, according to Gartner Consulting. As sales growth slowed domestically, Chinese vendors saw a "new China" in next-door India.
Xiaomi said it "set a record" by selling more than 1 million smartphones in India from Oct 1 to 18 last year, a festive period comparable to Spring Festival. Its smartphone revenue surpassed $1 billion last year in India, where cricket is "a way of life, a culture, even a religion", in the words of Sky Lee, president of Oppo's India branch.
Even Apple ensured its CEO Tim Cook's attendance at an IPL match last year and received some media coverage, despite the minuscule market share in India of iPhones and iPads, which are considered costly.
