Price disparity between offline and online a hurdle in bagging more Indian market share: HTC

NEW DELHI: Taiwanese smartphone maker HTC has said higher margins offered by the Chinese rivals to retail channel network and price disparity between offline and online marketplaces are some of the biggest challenges it faces in getting a larger slice of the Indian market, particularly the premium segment.

“Flooded with competition (Chinese) products, channels require different margins and rivals offering a lot more create obviously even a tougher environment,” said Chialin Chang, president of HTC Corporation’s smartphone and connected devices business.

With increasing prominence of Vivo, Oppo, Xiaomi and Gionee in the Indian market, brands such as Apple, Samsung, HTC, Sony and LG, in addition to homegrown Micromax, Lava, Intex and Karbonn, are losing share to Chinese brands that now corner more than 50 per cent of the market.

The Taipei-based mobile phone company, which predominantly offers premium range product, had in May unveiled a high-end HTC U11smartphone and is aiming to reintroduce its flagship Desire range in a price band of Rs 10,000-25,000 in India.

HTC, according to Counterpoint Research, had 1.3 per cent market share in India in 2016. The pain point for HTC, according to Chialin, is how to capture the premium or top-end consumers in the Rs 50,000 and above price bracket.

The design and innovation-led strategy will continue to be at the centre stage for the company, he said. HTC had a negligible share in the premium market, as per a Hong Kong-based market research firm.

“When you are getting in a certain price tier, there is a cost sensitivity, and pricing differential in the online and the offline,” Chialin said, adding that regulatory intervention might address online and offline price disparity.

Counterpoint Research Analyst (Mobile Devices & Ecosystems) Karn Chauhan, however, said there are other reasons for the growth of Chinese brands. These include product design, affordable flagships and larger investments in online channels, a faster way to reach young and urban customers, he said.