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Samsung set to profit from growing anti-China sentiment in India

Samsung’s well-positioned to emerge as the biggest winner of the growing anti-China sentiment in India, industry watchers believe. Escalating tensions over the Himalayan border dispute and the global coronavirus pandemic resulted in the world’s second most populous country adopting a range of protectionist economic measures, at least relative to how they impact Chinese businesses. New Delhi’s recent ban of 59 mobile apps owned by China-based entities is perhaps the most prominent example of that initiative, but it’s only a matter of time before the trend gains enough momentum to begin impacting the local smartphone market, according to some analysts.

Director Neil Shah of Counterpoint Technology Market Research is one of the experts subscribing to that theory. The Modi administration’s recent moves aimed at disturbing Chinese supply chains in the country mean companies like OPPO and Xiaomi will find it impossible to maintain their performance in India even if the strengthening anti-China attitude currently engulfing the nation somehow fails to affect the local demand for Chinese smartphones, Shah argues.

Samsung wins – by doing nothing

Samsung is consequently forecast to regain the position of India’s second-largest smartphone brand by September, with some industry watchers speculating that may have already happened in the second quarter of the year. As a reminder, it was just several months back that Samsung was outpaced by Vivo after already losing the industry-leading position to Xiaomi in 2017. Estimates based on Q1 2020 data have Vivo and Samsung holding 17% and 16% of the Indian smartphone market, respectively. Xiaomi is still far ahead of both at 30%, thus remaining relatively comfortable in spite of recent India-China animosity.

As one of the rare few remaining smartphone markets in the world that still shows strong signs of growth, India remains a highly attractive proposition for nearly every OEM on the planet, which is also why it’s so extremely competitive. Few can afford to survive even a short attempt at chasing the increasingly slimming margins resulting from that state of affairs, however, and the reason Samsung’s been losing to Chinese brands in the first place was its inability to cut manufacturing costs to the point of matching its rivals’ prices.

Whether the current trend continues to the point of even remotely endangering Xiaomi’s entrenched position in India remains to be seen, but no such potential swings are likely to come into sight for at least another year.

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