Every Phone Brand Says India Is the Next China. We Found 45 Facts About What the Indian Market and Indian Buyers Are Really Like
It won't become the next China anytime soon, but it's a market smartphone brands can't afford to skip.
It won't become the next China anytime soon, but it's a market smartphone brands can't afford to skip.
Every company that makes phones is talking about India.
Tim Cook went to India this year to meet government officials and open an R&D center.
Chinese companies have been going to India since 2014 to hold launch events, buy ads, and build factories. Lenovo announced last month that it became India's largest smartphone maker in 2016. Lei Jun said Xiaomi would be No. 1 in India within three to five years.
Even Nokia, which has just announced it is returning to the smartphone market, has named India one of its main targets.
India's population reached 1.34 billion this year and is growing three times as fast as China's. It is only a matter of time before it becomes the world's most populous country.
Chinese phone companies have spent two years saying they will go to India, and talking about how to break into a market of more than 1.3 billion people with enormous potential.
So what does that market actually look like now? Is it about to see the kind of explosion China's market saw five years ago? Here are 45 facts.
What brands do Indians buy, and how many?
1. So far this year, Indians have bought 100 million phones — about a quarter of what China bought.
A report from IDC shows smartphone shipments in India topped 30 million units over the past three months, a number analysts called a "milestone."
2. Samsung is the phone brand Indians trust most, but its lead is shrinking.
Lenovo says it is already No. 1 in India. But the numbers from IDC, the industry's most authoritative research firm, show that Samsung — which took the top spot from Nokia in 2013 — is still the best-selling phone brand there. Its lead is no longer as clear as it was two years ago.
3. Among Chinese brands, Lenovo sells the most, but it isn't growing fast.
Lenovo has the largest market share in India, and its growth has slowed since late last year. OPPO and vivo, which IDC still lumps into its "other" category, are the fastest-growing Chinese brands of the past two years.
4. Over the past three months, OPPO, vivo, and Xiaomi together took a third of the Indian market.
According to market research firm Counterpoint, the combined India market share of OPPO, vivo, and Xiaomi rose from 27% in the previous quarter to 32% in the third quarter.
5. Over the past two months, the phone brands Indians searched for most online were Lenovo and vivo — ahead of Apple and of India's own brands.
vivo briefly passed Lenovo this month as the most-searched phone brand in India, then fell back. Apple slipped from second place last October to third now.
India's homegrown brands, meanwhile, have faded. Even Micromax, the largest local phone company, is no longer as popular as the Chinese ones.
6. Nokia still had the second-largest installed base of smartphones in India as recently as last year.
Nokia's sales have been sliding in most countries since 2011. But its installed base has shrunk at different speeds in different places. In India, the collapse is mostly a story of the past year.
StatCounter, which counts every phone connected to the internet, shows Nokia was still No. 1 as late as 2014. Its collapse in India began in the second half of 2015 — exactly when Chinese makers such as OPPO and vivo were getting a collective foothold there. Chinese Android phones priced around 1,000 yuan replaced the Nokia handsets Indians had been carrying.
Income decides buying power — and decides that Apple doesn't sell well there
7. Per capita disposable income in India is US$1,808, about 40% of China's.
Trading Economics puts 2016 per capita disposable income at US$1,808 in India and US$4,527 in China.
8. What an iPhone 7 costs in India would buy an iPhone 7 Plus in the United States.
Incomes are lower, but tariffs and distribution costs make the same phone more expensive in India. The black 32GB iPhone 7 costs 4,796 yuan on Apple's US store, 5,388 yuan on its Chinese store, and 6,000 yuan on India's Flipkart; the iPhone 7 Plus costs 5,688, 6,388, and 7,220 yuan. (The US price already includes the average 7.5% sales tax.)
9. Measured by per capita disposable income, a year of the average Indian's income buys two iPhone 7s.
2.1
units
Number of iPhone 7 32GB units India's per capita annual income can buy
5.8
units
Number of iPhone 7 32GB units China's per capita annual income can buy
67.5
units
Number of iPhone 7 32GB units the US per capita annual income can buy
Per capita disposable income in India, China, and the US is 12,455 yuan, 31,195 yuan, and 323,954 yuan (RMB), respectively.
10. So the iPhone has only a 2.81% market share in India.
By StatCounter's count of connected devices, iOS holds 2.81% of the Indian market and Android 68%; the rest is Nokia.
As for people buying new phones, a Strategy Analytics report says 97.1% of them chose Android this year.
This is a market for phones that cost about 1,000 yuan
11. The average smartphone sold in India in 2015 cost US$132 — about a month's wages for the average Indian.
12. Of India's more than 1.3 billion people, only 17% use a smartphone, and more than a fifth have no phone at all.
A Pew Research survey found that 17% of Indians — 220 million people — now use smartphones. More than a billion people in the country still use feature phones or have no phone at all.
13. The phones that sell best online cost about 1,000 yuan
14. As for the widely reported "$4 phone," it was a scam, and it came from a Chinese company.
The phone was called the Freedom 251 — the number is its price in rupees, about $4.
Reporters later found the handset was made in China under a white-label deal, which triggered an investigation by Indian regulators. The promised delivery date of this past June is long gone, and the phone has simply vanished.
15. The same Xiaomi phones cost more in India.
The list above collects the 20 best-selling phone models recently on Flipkart, India's largest e-commerce site. On the right are the prices of the mainland-China versions on JD.com. Half of the models aren't sold in China at all.
E-commerce is still thin in India, but for phones it is already an important channel
16. Rural residents are 30% of India's mobile internet users.
The number of mobile internet users in India has grown fast since 2012, and much of that growth has come from the countryside and remote areas. Their share of all Indian mobile internet users rose from 8% in 2012 to 29% by this past June; the total has grown roughly eightfold in four years.
17. That geography is why a third of the phones sold in India are sold online.
Data compiled by Dazeinfo shows that in 2015, one of every three smartphones sold in India was sold online. Lenovo sold the most phones online in India; Xiaomi ranked fourth.
18. A local company leads India's e-commerce market
Flipkart holds close to half the Indian market. But tougher competition is coming: Amazon has said it will put another $3 billion into India, and has launched its Prime membership there.
Two months ago Walmart was in talks to invest in Flipkart, India's largest e-commerce company — it may want into India's retail market too.
19. But e-commerce in India is still a small business, about 2.5% of all retail.
eMarketer puts e-commerce at 2.5% of India's retail industry, with annual sales of $23.3 billion. China's e-commerce sales passed $560 billion back in 2015 — more than 24 times India's.
20. The business is small for now, but digital and mobile advertising have already picked up speed ahead of it.
eMarketer's tracking shows spending in India's digital ad market growing steadily at about 12%. Total digital ad spending was $729 million in 2015 and $933 million in 2016. Mobile took $243 million of that, double the 2015 figure.
Carriers don't have much clout in India
21. India's largest mobile carrier has fewer subscribers than China Mobile has 4G users.
China's telecom market is divided among three carriers — China Telecom, China Mobile, and China Unicom. India's is split among a dozen or so carriers of varying size. The biggest is Airtel India, a subsidiary of the Bharti group, with 256 million subscribers in India — still fewer than China Mobile's 4G users alone.
22. Almost all of India's mobile internet users are on 2G/3G. 4G is a privilege of the 1%.
2G and 3G are still the networks most used in India's major cities. Only a few carriers offer 4G, and only in a few cities: New Delhi, the capital, got 4G access this past June.
23. India's largest mobile carrier has 77,000 3G base stations. China Mobile has 20 times as many 4G base stations.
24. Yet in 2016, India's GSM carriers made an average of 12.71 yuan per subscriber per month — more than China Mobile did.
25. Slower, yes — but Indian users pay far less for data than Chinese users do.
Airtel's 1GB plan costs about 30 yuan and its 2GB plan about 50 yuan. Indian "3G," though, doesn't necessarily run at 3G speeds.
What do Indians use their phones for? Seven of the top 50 apps are about Prime Minister Modi
26. Indians use 410MB of mobile data a month, about half what Chinese users use.
27. Young Indians spend 2.2 hours a day on their phones, twice as long as people over 46.
As everywhere else, the young use their phones the most.
28. India's heavy phone users install 29 apps each, on average.
29
apps
Average number of apps installed per Indian smartphone
29. Their "WeChat" and their "Weibo" both belong to Facebook.
Facebook and WhatsApp, which it bought, capture far more time in India than anything else. The average phone user spends 16 minutes a day on Facebook and 13 minutes on WhatsApp.
30. The internet apps Indians use most look much like the ones in the US and Europe — except for the browsers.
India's top 10 free apps on Google Play
1
2
Opera Mini
3
MyJio
4
Paytm
5
6
JioTV
7
Messenger
8
UC Web
9
SHAREit
10
Hotstar
The odd ones out are Opera Mini and UC Web, data-saving browsers that have gone out of fashion almost everywhere else. SHAREit, made by Lenovo, caught on alongside Lenovo's phones.
31. The app that eats the most of their data each month is YouTube.
32. On video sites, what Indians love most are song-and-dance videos and local movie trailers
YouTube's top 10:
1
A weight-loss workout video
2
The trailer for The Mummy
3
A Surjit Khan music video
4
The trailer for the comedy Jomonte Suviseshangal
5
The trailer for a Ram Charan film
6
The Kapil Sharma Show, a reality show
7
A news segment on China's suspended monorail
8
A Sheera Jasvir music video
9
A sports clip of an athlete making a "zip it" gesture
10
The trailer for a Shah Rukh Khan film
33. To fit local network conditions, YouTube launched an offline version.
Uber goes further: you don't even have to download the app. Go to dial.uber.com, book a ride, and pay in cash.
34. By downloads, Uber has already beaten India's own ride-hailing company, Ola.
On Android's download rankings, Uber sits at No. 26 overall; Ola is 32 places lower.
35. Indians skipped the PC era. Since 2012, the phone has been their main way online.
StatCounter's data shows that by September 2012 India's mobile traffic had already passed desktop traffic, 52 to 48.
Worldwide, mobile traffic didn't pass desktop until this past October.
36. The free apps Indian users like most are messaging and social ones; the paid charts are led by productivity apps.
In China and the US, the two biggest app-revenue markets, games dominate. In India, perhaps because smartphone use is still thin and business use accounts for more of it, tools remain the mainstream.
Oh, and there is one more important app category: the prime minister of India.
37. Seven of the top 50 Android apps have something to do with Prime Minister Modi.
Android apps related to Prime Minister Modi
11
Modi Keynote
16
Narendra Modi
25
Modi ki Note
34
Modi KeyNote
36
Modi Keynote Prank
43
Modi KeyNote Original
50
Modi Keynote Hindi News Alert
Among the apps on App Annie's top 50 free Android chart for India, as many as seven relate to Narendra Modi, India's current prime minister. The names run to things like collections of his quotations.
Quite something.
38. Chinese companies have 10 apps on the top 50 free Android chart, three of them from UC.
Chinese apps among the top 50 free apps on the Google Play Store's India listing
8
UC WEB
9
SHAREit
15
UC News
20
Xender
22
UC Mini
29
Bigo
31
App Lock
35
Ji Camera
37
YeeCall
38
LBE Parallel Space
39. Alibaba, Tencent, and other big Chinese companies are entering India's app market by investing in local ones.
Major investments by Chinese internet companies in India
Ola
Tencent invested in Didi, and Didi invested in Ola — India's "Didi."
Paytm
Invested in separately by Alibaba and Ant Group — India's "Alipay."
Hike
Invested in by Tencent — India's "WeChat."
Dailyhunt
Invested in by Toutiao — India's "Toutiao."
Snapdeal
Alibaba — India's "Tmall."
Practo
Invested in by Tencent — an online search service for medical resources.
40. Thanks to demonetization, Indian payment service Paytm grew its user base sixfold and its revenue ninefold in a year.
India moved these past few days to scrap the 500-rupee note, and Paytm, a mobile payment company, picked up a wave of new customers overnight.
At a summit earlier this year, Paytm CEO Vijay told QDaily the company's users had grown from 20 million to 135 million within a year, and revenue from $400 million to $4 billion.
India's phone market today looks a lot like China's five years ago
41. India's phone market is about the size China's was five years ago.
Phone sales in China hit 25 million units in the third quarter of 2011, and 30 million by the end of that year.
42. Its internet population also looks like China's five years ago.
Figures from China's Ministry of Industry and Information Technology show that in 2011 China had 457 million internet users, more than 300 million of them mobile, and internet penetration of 34.4% — a market growing fast.
43. Five years ago was exactly when China's smartphone market took off.
China's market opened up quickly after 2011: smartphone shipments that year reached 72.1 million units, up 103.1% from the year before.
People were getting used to phones that did more than call and text — shopping, ordering food, paying the utility bill, all on a phone.
And 2011 was exactly when Chinese Android brands, starting with Xiaomi, rose and pulled down the average price of a phone. Smartphones broke out across China.
But none of that guarantees the same thing will happen in India.
44. Growth in this market may be held back by slowing growth in per capita income.
45. Infrastructure — 4G, Wi-Fi, payment systems — could all be problems.
China's 4G penetration has reached 45%, and 91.7% of its mobile internet users get online over 3G or 4G.
Behind that is heavy spending by Chinese carriers: China Mobile's capital expenditure in the first half of 2016 alone came to 83 billion yuan, five times India's, of which 46.2 billion yuan went into building 4G networks.
When smartphones began to spread in 2011, Baidu, Alibaba, and Tencent had each already gathered hundreds of millions of users.
India's government, meanwhile, restricts phones with less than 30% local content, which has kept overseas brands from moving in quickly — they have had to wait and build factories.
That is the less hopeful side.
The hopeful side is that the exploratory phase of internet services is largely over: Flipkart, Ola, and Paytm were all built by copying services from abroad. And a 1,000-yuan Android phone today is far more usable than the 2,000-yuan Xiaomi of 2011.
In short, this market is unlikely to become the next China anytime soon. But for smartphone brands that have hit a ceiling in most of the markets they are in, it is already one they cannot afford to give up.
Translated from the original QDaily article. Original publication date retained.