In recent years, India’s domestic image has featured a contrast:
On the one hand, India has fined Xiaomi a huge sum of 4.8 billion and has “doubled its attention” to Chinese companies. Ordinary people believe that India has become a place for “raising Gu” and is not worth investing in;
On the other hand, Xiaomi, which has been cut off, insists on expanding its investment in India. Even BYD, regarded as “sane in the world” and “will not deliver the car unless the full payment is paid,” has also been revealed to invest 7 billion yuan to build a factory in India.
Behind the “cold at the bottom and hot at the top,” India seems to have some magic power, which attracts Chinese companies to “stick a hot face to a cold ass” even if they are against the trend of domestic public opinion. Many people are puzzled by this, thinking they are “proactively sending money to India.”
Is this the case?
Apple may have answered this question for Xiaomi, BYD – yes, India deserves it.
Apple’s reference answer
Recently, according to data from market research firm Counterpoint Research, the iPhone’s share of the Indian smartphone market reached 5.1% in the second quarter of this year, and shipments increased by 50% year-on-year. Overall, smartphone shipments in India fell by 1% during the same period.
In 2018, five years ago, Apple’s market share was only 1%.
If you only look at the market share, whether 1% or 5%, Apple can be called “leftovers” in India. But when discussing the Indian market, remember that this country has the same population as China.
According to Counterpoint Research estimates, with a 5.1% share, India surpassed Germany and France in the second quarter to become the fifth largest market for Apple’s iPhone. India is ranked ahead of the United States, China, Japan, and the United Kingdom.
Of course, Rome wasn’t built in a day, and it wasn’t all smooth sailing for Apple in India. Before becoming the fifth largest Apple iPhone market, India was also a “swamp” for Apple.
According to Canalys data 2018, Apple’s iPhone sales in India fell by 40% year-on-year, and its market share fell from 2% to 1%. We must know that the penetration rate of smartphones in India is less than 50% at this time, and the market still has great room for growth.
Just like the special “care” encountered by Xiaomi, Amazon, etc., Apple also failed to escape the “claw” of India.
In 2018, India’s antitrust regulator announced an investigation into Apple, asking it to explain its pricing and sales strategies in the Indian market.
In 2019, Apple was again investigated for failing to comply with local environmental regulations and policies. The Indian Environmental Management Agency accused Apple of failing to submit environmental protection data for its products on time and said that further action may be taken against the company.
In 2021, an Indian non-profit organization complained that Apple took a 30% cut from some developers when they sold digital content through Apple’s apps, harming the interests of software developers and stifling competition. As a result, the Competition Commission of India ordered an investigation into how Apple operates its App Store and may impose operational fines on it.
Fortunately, despite constant investigations, India has never really “killed the chicken and picked the eggs” and made Apple pay the price.
Now, after many years of struggling in India, India has begun to show strong market returns to Apple-from 2018 to 2023, Apple’s market share has increased by five times. Against the background of the global decline in smartphones, the Indian market is even more valuable.
Apple’s position in the high-end market in India is also becoming more and more stable. According to data, at a price above 45,000 rupees (about 550 US dollars), the iPhone’s market share is as high as 62%, far exceeding other competitors.
“There are a lot of people entering the middle class, and I really think India is at an inflection point,” Cook told analysts on a conference call. “The Indian market is incredibly dynamic,” and he sees India as the next major market for growth.
Once upon a time, Cook also used similar words to modify the Chinese market. And it gets to the heart of the big companies’ love of India — the market is too big to ignore. As a commercial company aiming to pursue profits, it is worth investing in as long as the benefits outweigh the risks. India is no exception.
Now that Apple has made a sample, the big companies may be more persistent in investing in the Indian market.
Is India miserable?
Undoubtedly, India has visible deficiencies in policy bias and unclear law enforcement. Still, as a developing country with a population of 1.4 billion, its progress cannot be ignored.
According to the “World Business Environment Report 2020” released by the World Bank, in 2015, India ranked 130th in the global business environment (a total of 189 economies). By 2020, India’s global business environment ranking has risen to 63rd, showing significant progress.
In June this year, Sonal Varma, chief economist of Nomura Securities, also said in an exclusive interview with Forbes that India and Southeast Asia will become the main growth drivers in Asia in the next decade.
On the other hand, despite being suppressed by the Indian government three years ago, Chinese companies have begun to return to India.
Tencent’s mobile game “PUBGMobile” was banned in 2020. In 2021, the game was renamed “BGMI” and re-entered the Indian market. It was banned again a year later. But in May of this year, the Indian version of “PUBGMobile” and “Battlegrounds Mobile India” returned.
According to SensorTower data, in June this year, the overseas downloads of “Battlegrounds Mobile India” increased by 63% month-on-month, exceeding 15 million times, ranking first in the overseas mobile game download list, and nearly 60% of overseas downloads came from the Indian market.
And the restart of the Indian market allowed Tencent’s “PUBGMobile” overseas revenue to increase by 27% month-on-month in June and returned to the top of the growth list and download list.
The example of Tencent proves that once the policy is stable and on the right track, those competitive products can quickly gain a foothold in India, even if they have been repeatedly “ravaged.”
Big companies’ respective calculations
PConline has been fined 4.8 billion huge sums of money; why doesn’t Xiaomi withdraw from India? The article explained why Xiaomi still wants to increase investment in India. In summary, there are two points: First, the Indian market has great potential, and Xiaomi still has a lot of room for growth; second, Xiaomi has many assets in India and a complex industrial chain.
BYD’s plan to invest and build factories in India is also based on market considerations.
As early as 2007, BYD entered the Indian market. Of course, at that time, BYD mainly produced batteries and components for mobile phone manufacturers, and its main focus was India’s low labor costs.
In 2013, BYD and the Indian company Olektra Green Technology announced cooperation to build a factory to develop and manufacture electric buses.
It was not until the end of last year that BYD launched its first passenger car ATTO3 in India, fully entering the new Indian energy vehicle market. It should be said that BYD’s layout for many years has established a relatively clear understanding of the Indian market.
Recently, according to foreign media reports, BYD plans to invest US$1 billion in India to build electric vehicle and battery production facilities with its partner Megha Engineering and Infrastructure (MEIL). According to sources, BYD aims to produce 100,000 electric vehicles annually in India, covering a multi-matrix product range from hatchbacks to high-end luxury models.
BYD India has also announced that BYD Auto will occupy 40% of India’s electric vehicle market by 2030.
In this market that even Tesla has not yet entered, BYD wants to preemptively replicate its successful experience in China.
Although Chinese companies do not have any preferential treatment in India and even have more risks, their market is still attractive enough to offset potential risks. In the words of Guo Guangchang, the founder of Fosun Group: “Everyone can do something that can be successful in one month; fewer people can do something that can be successful in one year; even fewer people are willing to do something that can take five years to succeed; if it can take ten years to do something successfully, basically no one will compete with you.”
