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

May 1, 2017 Posted by India Briefing Reading Time: 5 minutes

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.

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.

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.

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