Due to Territorial Dispute
According to Chinese media reports on August 17, the Indian government imposed anti-dumping duties on 93 kinds of import product items from China. This includes a wide array of products including electronics, petrochemicals, chemicals, steel, nonferrous metals, textiles, yarn, machinery, rubber, plastics, electronics and consumer goods.
Problems between India and China are not simply confined to territory. China did not support India’s joining the Nuclear Suppliers Group (NSG) and India refused to participate in China’s "One Belt, One Road" Project which envisions the Silk Road economy.
According to the 2016 China-India Trade Report, China is India's largest trading partner and the largest import market. Last year, the trade between the two countries amounted to US$71.18 billion of which India's imports of Chinese products added up to US$59.43 billion. But India’s exports to China stood at only US$11.75 billion.
India’s territorial disputes and trade war with China are expected to turn Indian market situations in favor of Samsung Electronics closely pursued by Chinese makers in the Indian smartphone market.
In particular, Chinese smartphone manufacturers which have been expanding their footings in India thanks to their price competitiveness are not expected to avoid disadvantages stemming from this situation. The Chinese smartphone market which has grown at an annual average rate of nearly 50% over the past 10 years has reached a saturation stage.
Chinese smartphone makers are turning their eyes to India from their home country. India's smartphone penetration is only 39% as of the end of last year. With a population of 1.3 billion, India is a market as attractive as China in terms of sizes. The Indian mobile phone market still has great growth potential as Indian customers are changing their mobiles from feature phones to smartphones.
India's smartphone market grew 18% year on year last year. Given that the overall global market growth rate was only 2% to 3% last year, India is emerging as the Land of Promise after China. India's smartphone shipments last year were less than 200 million units. Compared to China with a similar population size which recorded more than 500 million smartphone shipments, less than 200 million units is a low level.
A rise in smartphone sales volume is blamed on a steady increase in ASPs of mobile phones. In the second quarter of this year, smartphone shipments in the Indian market grew 4% year on year and overall sales spiked 25% due to an increase in smartphone ASPs.
Samsung Electronics, which has been ranking first in the Indian smartphone market for several years, is being chased by Chinese smartphone makers. Samsung Electronics professed itself the number-one company with a market share of 24.1% in the Indian smartphone market in the second quarter of this year.
Xiaomi of China which entered India in 2015 took second place with a share of 15.5%, followed by China's Vivo (12.7%), Oppo (9.6%) and Lenovo (6.8%). Chinese companies account for 44.6% of the combined market of the top five companies.
"In the Indian market, Chinese smartphone makers are likely to be affected by the pressure of tariffs in the short term and suffer from a decline in their brand value in the long term," an industry official said. “It seems that the relationship between the two countries will improve soon.”