The Chinese vendors have been successful by a combination of strategies, including online flash sales and by pushing low-cost 4G phones, priced at between US$100-150, a market that was unattended by Indian and global vendors, according to research firm IDC.
Lenovo, Xiaomi, Huawei and Gionee together got a 12 percent share of the Indian smartphone market, double from a year ago. Smaller Chinese vendors like Vivo, Oppo and OnePlus would have garnered less than 5 percent of the market, said IDC research manager Kiranjeet Kaur on Tuesday.
The Chinese vendors have also proven that they are willing to get closely involved in the Indian market, in some cases getting their products assembled in India, both to avoid high import duties on smartphones and to meet the Indian government's initiative to boost local manufacture. These companies have turned to India as the next big growth opportunity, as the China market started to slow down, Kaur said.
Some of these companies are expected to tie with third-party manufacturers like Foxconn Technology Group, which has announced plans to set up 10-12 electronics factories in India by 2020. Xiaomi, for example, announced its first locally made smartphone in the country on Monday. When companies are targeting low-cost phones, a small savings in import duty or a tax rebate can be critical, Kaur said.
26.5 million smartphones were shipped to India in the second quarter of 2015, up by 44 percent from 18.4 million units for the same period last year, according to IDC. But almost 50 percent of the smartphones shipped in India were priced at below $100, which shows a significant difference between the Indian market and the neighboring Chinese market, where only about one-fifth of the smartphones sold were priced at sub-$100.
Samsung Electronics held on to its number one position with 23 percent share and even increased shipments in the quarter from a year earlier, but this came mainly from phones in the affordable segment and older models. Indian vendor Micromax came second with a 17 percent share.
Apple does not rate among the top five vendors in India. The company does not have an Apple Store in the country in contrast to 19 in China, though there have been reports for some time that it may be planning a big push, including by selling earlier versions of its iPhone and distributing its products both online and in smaller cities in the country.
However, Kaur does not see Apple getting into the list of top five smartphone vendors in the country for at least the next two years.
IDC said it does not expect Indians to switch quickly to smartphones, and vendors should keep in mind that they are in the country "for the long haul." However, it expects India to maintain a double digit growth rate in smartphones over the next few years as people move to smartphones and gradually upgrade to 4G versions as well.
By 2017, IDC expects India to overtake the U.S. to emerge as the second largest smartphone market worldwide. The one big difference: the smartphones sold in India will be a lot cheaper than those in the U.S. where flagship phones are dominant.