Xiaomi will likely narrow the gap with the Indian market leader Samsung once the smartphone retail figures for the second quarter of 2017 are released. In the first quarter, Samsung held the top place for the number of smartphones sold in India with a 22 percent market share. However, recent trends show that Xiaomi, which currently holds 14.8 percent of the Indian smartphone market, will likely increase its market share and narrow the gap with the South Korean tech giant. In order to increase its market share, the Chinese manufacturer has been subsidizing some marketing costs of several smartphone retailers in the country. In addition to that, the manufacturer has successfully designed smartphones that cater well to Indian consumers, some industry watchers believe. Those smartphones usually sport more premium specs compared to competing devices in the same price point, consequently offering better value for money.
Samsung is looking to maintain its dominant position in the smartphone market and has also retaliated against the Chinese manufacturer by offering its own marketing subsidies to retailers. It also stopped supplying smartphones to brick-and-mortar stores that have been giving preference to Xiaomi. This was possibly done in order to pressure those retailers to renegotiate with the South Korean tech giant. Samsung is now likely looking to retain some influence among local retailers that it lost when Xiaomi started using aggressive marketing strategies. However, Samsung's decision to stop supplying its smartphones to retailers could backfire since other manufacturers could take advantage of the empty shelves to gain store visibility at the expense of the company. Aside from the extensive overhaul of its marketing strategy, some analysts claim that Samsung should also develop smartphones that specifically cater to Indian consumers.
India is currently the second largest smartphone market in the world, right behind China. However, there is a lot of room for sales growth in the said market as LTE networks are yet to be fully deployed and utilized. In addition to that, only one out of five Indian phone users currently possess a smartphone. This low penetration of smartphones and the continuing deployment of LTE networks in India make it a lucrative market for handset makers.