It is always difficult for mid-sized smartphone makers to survive in the long run when fierce competition sets in amid fast-changing consumer needs and technologies — especially in price-sensitive markets like India.
After LeEco — a Chinese conglomerate that shut operations in India last year after financial crisis hit it hard — a second-tier Chinese smartphone maker, Gionee, is now in troubled waters on home turf and the ripples may affect its India operations too, say industry experts.
Chinese media reported in January that a local court has frozen 41.4 per cent stake of Gionee Chairman and Chief Executive Liu Li Rong for two years.
Although the exact reason was not made public, some media reports said it was because of the “gambling debts”.
The company is also reportedly facing financial woes in paying its suppliers, reported Nikkei Asian Review in mid-January. In a statement, Gionee told the paper that the case was still in the judicial process and that the company would resolve the issue as soon as possible.
Meanwhile, China, the world’s largest shipper of smartphones, suffered its first-ever decline in 2017 as device shipments fell 4 per cent Year-on-Year (YoY) to reach 459 million units, reported Singapore-based market research firm Canalys.
“The declining Chinese market will have a detrimental impact on those Chinese vendors that have been heavily relying on their home market. The threat to vendors such as Gionee and Meizu is now closer than ever,” said Canalys Research Analyst Hattie He.
Back in India, after running domestic operations for almost five years, Gionee India’s CEO and Managing Director Arvind Vohra stepped down last August. Vohra still continues as Executive Director.
David Chang, Global Sales Director for Gionee, is now leading the India operations. Sources told IANS the company may scale down its operations in India and introduce a different business model to ramp up growth.
Gionee, which established its presence in India in 2012, claims to have retail presence in over 42,000 stores and has 600 exclusive service centres in the country. It also claims a customer base of 1.25 crore in the country. The company has also been aggressively pushing for sports sponsorship.
Gionee, however, had a mere 2.2 per cent share in the Indian smartphone market for 2017, according to Counterpoint. Last year, the company announced to invest Rs 500 crore towards a new manufacturing/assembling unit in Faridabad, Haryana, but there was no news after that, reported ET Telecom.
