Chinese smartphone manufacturer Honor is set to make a triumphant return to the Indian market after a hiatus.
The company will be re-entering India through a strategic licensing deal with a newly established local entity named Honor Tech. This move is part of Honor’s efforts to regain its foothold in India, where it had previously faced challenges due to limited resources and strategic missteps.
At present, Honor is the fourth largest brand in China smartphone market with 16 percent share in the second quarter of 2023, according to Canalys.
Honor’s reentry strategy is backed by a commitment to domestic manufacturing, with plans to initiate production in India by early next year. This decision aligns with the Indian government’s push for local manufacturing and self-reliance in the technology sector.
Unlike its previous approach, where India was not a key focus market, Honor is now determined to make a significant impact. The Honor smartphone brand will launch a range of smartphones, including three variants, with the mid-range Number series slated for release by September. These devices are expected to cater to the diverse demands of Indian consumers.
Honor Tech, the local firm behind the revival, has secured exclusive rights to manufacture, sell, and service Honor-branded smartphones in India, Reuters news report said. This approach emphasizes accountability and local involvement, addressing previous concerns raised by the Indian government regarding the presence of Chinese brands in the market.
Honor was previously owned by Huawei, the leading telecom equipment maker in the world. Huawei has sold Honor due to uncertain business conditions in the wake of restrictions in procurement of US technology for manufacturing smartphones.
Honor Tech CEO Madhav Sheth, a former executive at Realme, a rival company, expressed confidence in the brand’s potential for success. Madhav Sheth also mentioned that all Honor phones will eventually be manufactured within India, demonstrating the brand’s commitment to the government’s Make in India initiative.
Challenges for Chinese brands have increased in India due to regulatory measures, app bans, and stricter investment scrutiny. Honor’s reentry will place it in direct competition with established players like Samsung, Vivo, Xiaomi, and Realme, as they vie for a larger share of India’s smartphone market.
Honor Tech aims to secure a 5 percent market share in terms of sales volumes by 2024, accompanied by a revenue target of at least 100 billion rupees ($1.20 billion). This ambitious goal reflects the brand’s determination to establish a strong presence in India’s competitive smartphone landscape.
Indian Smartphone Market Shows Signs of Recovery and Growth
The Indian smartphone market is displaying signs of recovery after a challenging period. According to Canalys research, smartphone shipments have stabilized at 36.1 million units, with a modest decline of 1 percent. This indicates a slight rebound after three quarters of decline. Sequentially, the market grew by 18 percent, attributed to improved inventory levels and a more favorable business environment.
Leading the market in Q2 2023 is Samsung, holding an 18 percent market share and shipping 6.6 million units. Vivo secured the second position, shipping 6.4 million units, followed closely by Xiaomi in third place with 5.4 million units. Realme and OPPO rounded out the top five with 4.3 million and 3.7 million units shipped, respectively.
Analysts suggest that brands are solidifying their positions by strengthening their collaborations with the Indian channel ecosystem. Investments in local suppliers, retailer relationships, and alignment with the government’s vision have been key strategies for success. Offline shopping remains a significant driver, especially in the mass-market and premium segments.
With a more favorable demand environment predicted for the second half of 2023, smartphone brands are gearing up for increased consumer spending during the festive season. The upcoming Cricket World Cup in October 2023 will provide a platform for promoting 5G services, driving brands to push their affordable 5G offerings to capitalize on the event. This expected surge in demand sets the stage for a competitive and dynamic second half of the year in the Indian smartphone market.
Image: HonorTech Leadership (L-R) – Madhav Sheth, CEO; Sanjeev Kumar, AVP Product & Sales; Anil Khandelwal, Director; Sharda Mandal, CMO; CP Khandelwal, SVP; Nisar Naikoo, COO; Dipesh Punamiya, AVP Services & Sales)
