Xiaomi, Vivo and Oppo: Political tensions in India and China are hitting the smartphone market.  But they need each other

Xiaomi, Vivo and Oppo: Political tensions in India and China are hitting the smartphone market. But they need each other


New Delhi
CNN Business

The Indian government is cracking down on companies that manufacture the country’s most popular smartphones.

Indians love Chinese smartphones, but over the past two months, New Delhi has stepped up scrutiny of three major Chinese companies – Xiaomi, Vivo and Oppo. Together, these companies control more than 60% of the Indian smartphone market, according to data from research firm Counterpoint.

Xiaomi, the best-selling brand in the country, was the first company face temperature regulators. In May, the country’s main financial investigation agency accused the Indian subsidiary of Xiaomi of making illegal transfers, violating foreign exchange laws.

Xiaomi India said at the time that “all of our operations are fully compliant with local laws and regulations”. It did not respond to other requests for comment this week by CNN Business.

Vivo, another major Chinese brand, has been Next on the list For Law Enforcement Directorate of India. Earlier this month, the agency accused the company of tax fraud and said it had conducted inspections at 48 Vivo locations in the country, seizing $60 million from its bank accounts.

A Vivo spokesperson told CNN Business that the company was “cooperating with the authorities to provide them with all the information requested.” Nor did she respond to a follow-up inquiry.

And just last week, Oppo became the latest Chinese smartphone manufacturer to be targeted in India. The company sells the two popular brands Realme and OnePlus in the country, and the Indian Directorate of Revenue Intelligence accused the company of committing evasion About half a billion dollars in taxes.

Oppo did not respond to a request for comment.

Meanwhile, Beijing has criticized the raids on Chinese companies, saying India is damaging its reputation among foreign investors.

In a statement earlier this month, the Chinese embassy in India said the investigations were disrupting “normal business activities” and raising concerns “the confidence and willingness of market entities from other countries, including Chinese companies, to invest and operate in India.”

Chinese tech companies have had a particularly tough time in India over the past two years, as New Delhi has cracked down since rising border tensions between the world’s most populous country.

in 2020, India has banned more than 200 apps – many of them Chinese, including the popular video platform TikTok.

Chinese vendors are also under the thumb of Indian regulators because they have “growthed too quickly,” noted Tarun Pathak, director of research at Counterpoint.

“India is seeking more clarity on how Chinese companies do business here,” he said. “Their balance sheets are now being looked at.”

He added that the Indian government is tightening regulations for foreign phone makers because they have realized that “these companies need India more than India does”.

Although the regulatory strictures are making business in India difficult, experts say it is unlikely that New Delhi will impose a total ban on Chinese smartphones.

“The Chinese companies are here to stay,” Pathak said, adding that “there are no other detainees.”

South Korean giant Samsung is the country’s best-selling smartphone brand and the only non-Chinese company among companies Top Five Sellers In India, according to data from Counterpoint. He “cannot increase his market share from 20% to 60% overnight,” Pathak said.

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She’s had big plans for India for years now, but she’s only taken over small piece of cheese from the market because their products are too expensive for most of the Indians.

Kiranjit Kaur, associate research director at the International Data Corporation (IDC), expects these companies to be back by the time the Diwali festival season – driven by shopping – begins in India in October. She added that these sensors would not be of interest to Indian consumers.

After the border clashes, calls for a boycott of Chinese companies, including phone makers, swept India, Kaur recalled.

She added that despite these protests, “there was no drop in shipment numbers” for these companies, and their market dominance continued.

India’s love of Chinese smartphones transcends any political tensions, mainly because they are considered to be very valuable in a price-sensitive market.

While Indian manufacturers have created affordable smartphones in the past few years –including one Developed by Mukesh Ambani, the billionaire head of India’s sprawling Reliance group, in partnership with Google – these fail to generate much excitement among consumers.

“If you compare the features, Chinese smartphones offer a lot, and they cost a little more,” said Kaur.

And despite new legal challenges, China cannot afford to abandon the Indian market. The South Asian country of more than 1.3 billion people is the second largest smartphone market in the world after China, Pathak said.

“India is very important to all the major players, whether they are American or Chinese,” he said. It is also the world’s largest “emerging market” with “nearly half of the country still not connected to smartphones”.

The Corona virus slowdown In China, this has hurt consumer activity, making India more attractive to cross-border companies.

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