India Market Watch: Chinese Smartphones Dominating, Karnataka State Most Corrupt

by

Xiaomi second largest smartphone brand in India, shipments quadruple in Q1

Smartphone manufacturer Xiaomi leads the Chinese juggernaut in the Indian mobile phone market after emerging as the second largest retailer. They are followed by compatriots Vivo, Lenovo, and Oppo. Korean manufacturer Samsung retains the top spot, albeit with a more or less stagnant market share.

Xiaomi’s performance is particularly dynamic: it shipped 3.8 million handsets in the first quarter of the 2017 calendar year, a jump up from three million in the previous quarter. Xiaomi’s market share is 14 percent currently; it was 3 percent in the first quarter of 2016.

According to research by Singapore-based Canalys, Chinese brands dominated market share with a combined 40.3 percent in the first quarter of 2017, while Samsung accounted for 22 percent and Micromax at less than six percent market share.

Indian firms failed to feature in the top five for consecutive quarters. Irrespective of their first mover advantage, they continue to struggle to meet Indian consumer demands and manufacture the right phones for existing segments, ultimately losing out on brand differentiation. The Chinese-Korean rivalry, on the other hand, is reaping the benefits of constant innovation, low cost production, and in-depth market research.

Related Link Icon-IB RELATED: India’s Digital Payments Future

India can leverage WhatsApp user base, develop business solutions

Out of a total of 1 billion using the WhatsApp internet messaging apps, 200 million are based in India. This makes India the biggest market for the Facebook-owned company, opening up possibilities for developing innovative, local business solutions, as has been the experience of similar platforms like WeChat in China.

Currently, WhatsApp is free for consumers, and the company is looking for ways to monetize the platform. Towards this, WhatsApp is gradually developing tools that could enable businesses and organizations – like banks and airlines – to communicate with consumers. India being a key market and IT hub could emerge with crucial solutions.

Professional Service_CB icons_2015RELATED: Pre-Investment, Market Entry Strategy Advisory 

IT infrastructure grows in northeast India

Northeast India has long suffered neglect due to a confluence of socioeconomic and political factors. However, under the present government’s ambitious economic growth agenda, the region is poised to play an important role with the development of its infrastructure, industry, and establishing connectivity with neighboring countries.

Recently, six IT parks and hubs were jointly set up by the Software Technology Parks of India (STPI) and state governments in six capitals in the northeastern states, namely Guwahati (Assam), Shillong (Meghalaya), Imphal (Manipur), Aizawl (Mizoram), Kohima (Nagaland), and Agartala (Tripura). The STPI is an autonomous society under the Union Ministry of Electronics and IT.

More importantly, an International Internet Gateway (IIG) is now set up in Agartala, Tripura through Cox’s Bazaar in Bangladesh; India’s third IIG after Mumbai and Chennai. This development will enhance eastern India’s ability to cater to the global IT market.

Karnataka state most corrupt in India, Himachal Pradesh least corrupt

Karnataka state has been identified as the most corrupt in a survey of 20 states conducted by the Delhi-based think tank Centre for Media Studies (CMS). The CMS Corruption Study 2017 reports that 77 percent of respondents in Karnataka encountered corruption while dealing with the bureaucracy, while only three percent of respondents from Himachal Pradesh responded likewise.

The CMS survey ranked Andhra Pradesh as the second most corrupt state (74 percent), followed by Tamil Nadu (68 percent), Maharashtra (57 percent), Jammu and Kashmir (44 percent), and Punjab (42 percent). Kerala (4 percent) and Chhattisgarh (13 percent) were among the three least corrupt states.

The survey stands in contrast to anecdotal evidence; many businesspeople in India contend that states in northern regions of India are exposed to higher levels of corruption. Critically, the data for this specific statistic is based on respondents’ willingness and ability to report experiences of corruption, which may also be influenced by the respondents’ understanding or tolerance of corrupt practices.

Given the level of foreign investment and MNC penetration in Karnataka, it is possible that respondents may be more responsive to the incidence of corruption at local levels.

 

About Us 

India Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEAN, China, Indonesia, Russia, the Silk Road, & Vietnam. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.
Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout India and the Asian region. We maintain offices in Delhi and Mumbai and throughout China, South-East Asia, India, and Russia. For assistance with India investment issues or into Asia overall, please contact us at india@dezshira.com or visit us at www.dezshira.com.

 

Related Reading-IB

dsa brochure

Dezan Shira & Associates Brochure

Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.

 An Introduction to Doing Business in India 2017

An Introduction to Doing Business in India 2017 is designed to introduce the fundamentals of investing in India. As such, this comprehensive guide is ideal not only for businesses looking to enter the Indian market, but also for companies who already have a presence here and want to stay up-to-date with the most recent and relevant policy changes.

Working as an Expat in IndiaWorking as an Expat in India
In this issue of India Briefing Magazine, we look at India’s living and working environment, HR and payroll laws, and the taxation norms as applicable to foreign nationals. India is the second most favored destination for expatriates that want to work in the emerging markets. Expatriates should take note of the basic social and welfare concerns as well as the regulatory and tax issues that apply to foreigners that work in the country.

Leave a Reply

Your email address will not be published. Required fields are marked *

Never miss an update

Stay ahead of the curve in emerging Asia by subscribing to our regional publications. Subscribers take full advantage of all our website features and receive regular updates from our local experts on doing business in Asia.

Subscribe
India Briefing