The numbers are a cause for worry for Samsung as they indicate that Xiaomi could continue to ramp up its presence in the country as e-commerce spreads to the rural and semi-urban areas.
During the last three months of 2017, Xiaomi accounted for 31.2% of all smartphone sold in Maharashtra, while Samsung accounted for just 15.3% of the total smartphone sales. Vivo too was at 15%, while Oppo had a 12% share.
Maharashtra, which includes the Mumbai market, is the biggest consumer of smartphones in India and accounted for almost 14% of the total smartphones sold during the last three months of 2017.
Due to the dominance of the Mumbai and Pune markets within the state, it is also highly penetrated by e-commerce, the primary avenue of sales of Xiaomi.
Samsung, on the other hand, does better in areas where people are still not used to buying their phones on apps like Amazon and Flipkart.
Moreover, said Faisal Kawoosa of CMR, the Chinese player has been trying to make its presence felt in offline space as well.
“Xiaomi opened two Mi Homes in the state during the months of October and November 2017. This strengthened its presence and access in the state,” he pointed out. In January 2018, it opened its third Mi Home in the state in Thane.
Kawoosa said most of the buyers were already smartphone users on the lookout for a device with 4G connectivity.
Besides, two thirds of these ‘upgraders’ in the state were using smartphones built by Indian brands such as Intex, Karbonn, Sony Mobiles and iBall, with Micromax accounting for 26% of ‘abandoned’ smartphones.
This move, said Kawoosa, was primarily driven by a desire to cash in on 4G services, whose prices have crashed by 95% in one year due to the entry of new operator Reliance Jio.
“This switch from Indian brands to Chinese and global Tier I brand like Samsung is primarily driven by users upgrading for 4G smartphones, where the Indian brands haven’t been able to establish a foothold,” he said.
3G data networks in urban areas have become practically unusable as these operators have tried to compete with cheap 4G plans, but without the necessary carrying capacity to match 4G.
Indian brands such as Micromax and Spice lost the market when the transition from 3G to 4G took place two years ago.
Xiaomi was the first brand to introduce a 4G smartphone priced below Rs 10,000, and followed it up with a series of affordably priced, yet high-speced devices in the Rs 10,000 and Rs 7,000 ranges.