Chinese Smartphone Brands Struggle To Break Into India’s Premium Segment Dominated By Apple & Samsung

Despite commanding over 60% of India’s overall smartphone market, Chinese smartphone brands are finding it difficult to make a significant impact in the high-value premium segment (priced above $600/₹50,000). This market is still dominated by Apple and Samsung, which together control more than 94% of the share, with little room for competitors.

The Premium Segment: A Stronghold for Apple and Samsung

Chinese brands, including OnePlus, Vivo, Oppo, Realme, and Xiaomi, have made strides in India’s mid-range and budget categories. However, their presence in the premium segment remains minimal, despite constant innovation and efforts to enhance after-sales services. According to IDC data for the third quarter of 2024, Apple and Samsung saw their combined share increase to over 94%, up from 90% a year earlier.

In contrast, Chinese brands like OnePlus and Vivo have struggled. OnePlus saw its share drop from 3.4% to 2.4%, while Vivo’s share plummeted from 0.8% to just 0.2% during the same period. As the premium segment grew by 85% year on year, Chinese brands’ lack of traction has been noticeable.

Industry analysts, including Upasana Joshi from IDC India, explain that the premium segment is still a two-horse race between Apple and Samsung, with Chinese brands unable to compete effectively at these price points. Despite their efforts, Chinese vendors are yet to win significant consumer loyalty in the above-$600 category, where the perception of premium quality remains closely tied to established players like Apple and Samsung.

Why Chinese Brands Are Struggling

Several factors contribute to Chinese brands’ challenges in the premium segment:

• Brand Perception: Chinese brands have historically been seen as leaders in the budget and mid-range markets, making it hard to shift perceptions to premium-tier products.
• Low Resale Value: Chinese smartphones face lower resale value, which discourages many customers from investing in premium models.
• Lack of Long-Term Appeal: While Chinese brands see initial traction with new premium offerings, the buzz typically fades quickly, with no sustained demand or market share growth.

Despite these challenges, Chinese brands remain committed to competing in the premium segment. OnePlus, Vivo, and others are now focusing on technological differentiation and offering premium after-sales services, such as doorstep repairs, 24/7 customer support, and loyalty discounts.

Sanyam Chaurasia, an analyst at Canalys, suggests that while initial interest is often high, Chinese brands need a long-term strategy to build brand loyalty and customer trust in the premium market. Offering financing options and luxurious packaging might attract customers, but sustained success will depend on long-term consumer satisfaction.

Chinese Brands’ Shift Toward Premium Offerings

Brands like Xiaomi, OnePlus, and Realme have expanded their portfolios to include premium devices aimed at competing directly with flagship models from Apple and Samsung. However, despite these efforts, their market share has remained limited.

Sudhin Mathur, Chief Operating Officer at Xiaomi India, acknowledges that although Xiaomi is unlikely to see immediate gains in the premium segment, the company will continue to push forward with industry-first offerings. Xiaomi’s average selling price (ASP) is around ₹18,000, while the industry ASP is climbing towards ₹24,000, reflecting the growing premiumisation trend in the market.

Will the Premium Segment Shift in 2025?

Experts predict that over the next few years, Chinese brands will continue to chase the premium market more aggressively. This shift will involve not only enhancing the hardware but also focusing on experiential software features, ensuring a premium user experience.

Anuj Sharma, Chief Marketing Officer at Xiaomi, mentioned that 2024 marked the first year with a full portfolio of flagship devices, which helped boost sales of Xiaomi’s lower-end products. While flagship phones may not yet be bestsellers, improvements in areas like camera quality are gradually improving customer satisfaction.

Even in the $400-$600 range (₹30,000-₹50,000), Apple and Samsung continue to dominate. These brands hold over 45% of the market share in this segment, with previous-generation models being more popular than newer launches from Chinese competitors.

Vivo, however, has emerged as the leader in this range, with a 20% market share, while OnePlus’ share has fallen from 37% in Q3 2023 to 14% in Q3 2024.

While Chinese smartphone brands remain dominant in the budget and mid-range segments, their efforts to break into the premium market will require ongoing innovation and consumer trust-building. The road to success in the high-value segment will involve not only improving product offerings but also enhancing the brand experience to shift consumer perceptions and loyalty away from Apple and Samsung.

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