The development came as Indian authorities like the Enforcement Directorate (ED) and Directorate of Revenue Intelligence (DRI) have conducted raids and investigations of major Chinese smartphone players…reports Asian Lite News
As reports surfaced that Shenzhen-based Honor, formerly under Huawei, has pulled out its team from India, the company said on Monday that the company is ‘maintaining business operation’ in the country.
According to a report in the South China Morning Post, the company’s business in India will remain in operation, managed by local partners, but the brand will adopt a “very safe approach.”
Honor CEO Zhao Ming told state-run newspaper Securities Times that Honor formed the India team a few years ago but chose to leave for “obvious reasons”, the report said.
Also Read
In a statement to IANS, a company spokesperson said it “is maintaining business operation in India and will continue its development”.
“Honor officially announces its exit from the Indian market” is not correct, the spokesperson added.
The development came as Indian authorities like the Enforcement Directorate (ED) and Directorate of Revenue Intelligence (DRI) have conducted raids and investigations of major Chinese smartphone players like Vivo, OPPO and Xiaomi.
Honor once held a 3 per cent market share in India during its peak in 2018 but fell out after the US put sanctions against Huawei.
Struggling to keep its consumer business afloat in the wake of the US sanctions, Chinese conglomerate Huawei in November sold off its Honor smartphone business assets to China-based Shenzhen Zhixin New Information Technology Co Ltd.
Honor smartphones were hit by US sanctions that prevent Huawei from doing business with the US companies.
Since its creation in 2013, the Honor brand has focused on the youth market by offering phones in the low- to mid-end price range.
In the next seven years, Honor developed into a smartphone brand that shipped over 70 million units annually.
In India, Honor had entered the laptop market and expanded its wearables portfolio in the country.
Meanwhile, the smartphone shipments reached 36.4 million units in the second quarter (Q2) in India, a 5 per cent decrease from the previous quarter, with major brands struggling to shift units as consumer demand dwindled, a new report has shown.
Xiaomi retained its market-leading position, shipping 7 million units, despite experiencing another quarter of both annual and sequential decline.
With 6.7 million shipments, Samsung came second, pulling closer to Xiaomi, according to market research firm Canalys.
Remaining in third place, realme shipped 6.1 million units, while vivo and OPPO completed the top five, shipping 6 million and 5.5 million units, respectively.
“Top Chinese brands, such as Xiaomi, vivo and OPPO, struggled with government scrutiny as well as financial problems. But the business impact remained limited, with no major changes in the vendor shares,” said analyst Sanyam Chaurasia.
In the premium segment, Samsung’s positive reception for its flagship S series boosted its value share, while Apple is using India’s performance-linked incentive (PLI) scheme to make the iPhone 13 locally and support future aggressive pricing, he added.
The smartphone players in India are looking to leverage strong channel collaboration as smartphone inventory is getting alarmingly high.
“Brands are using early deep discount sales, which began in June via the ecommerce channel, to get rid of stock before the holiday season kicks in. There will be more of these monsoon season sales on Flipkart and Amazon, with significant discounts to stimulate demand and prepare for upcoming launches in Q3,” said Chaurasia.
While the second half of the year will not see a surge in pent-up demand like last year, the rebound through the festival holiday season will be driven by replacement purchases.
The weakening Indian rupee, rising retail prices and Chinese brands’ compliance risks are hindering growth in the sub-$200 segment, the analyst said.
ALSO READ: Uber brings mobility fintech Moove to India
[soliloquy id="151345"]