The emergence of Realme has heated up the feature based e-commerce smartphone market when experts believed that there’s none to challenge the dominance of Xiaomi in India but, Realme is proving them wrong by repeating what Xiaomi did the best, thus, emerging as the new market disruptor at the moment and we hope that it will continue to do so in 2019.
The race between Realme and Xiaomi is really heating up in the Indian mobile ecosystem given the fact that there are other players too in the market that are vying to take the lead in this domain. The competition between Realme and Xiaomi is interesting because Realme has learnt a lot from the eight years’ experience of Xiaomi where it offers price competitive specifications as per the needs of the Indian consumers.
There’s no denying that India is a growing economy and the per capita income is still among the lower side as compared to developed nations. We as Indians are quite price conscious too when we go out to buy products and services and zero in on to those products in which we see value for money. Similarly, Xiaomi understood the Indian mindset and gave smartphones which were features laden and competitive on prices as well. It went on to become the favorite online brand in India within eight years of its operations and continues to do so dethroning Samsung to lead the Indian mobile market. Now, the history is repeating itself again, Realme is walking the same path as travelled by Xiaomi. Within just six months of operations in India, Realme has launched five smartphones and the remarkable part is that these smartphones were sold out within days of their respective launches as the company claims. Realme is getting enough traction in the urban market as it would have expected or I would say more than it had expected it to be.
Madhav Sheth, Chief Executive Officer, Realme India said, “Smartphone industry is rapidly developing with adoption of innovative technologies and growing education around mobile phones across India. Given this there is a fierce competition in the smartphone market sweeping in. Realme as a brand has stepped in the competition as a market disruptor focussed on delivering products packed with power and style at the best price possible.”
Realme is focusing on the urban youths of this country who do not want to spend much on a smartphone as they believe that it does not has the longevity so they tend to go fora value for money smartphone that possesses all the desired and current features without burning deep into their pockets and when we look around, only two brands emerge; Realme and Xiaomi that do so. That’s why the competition and comparison are readily drawn between these two.
Even the industry analysts believe that Realme has the potential to take down upon Xiaomi due to its innovations and price competitiveness it has shown.“Realme, as a sub-brand and later independent brand, has grown aggressively over the past six months. It is one of the rarest brands that have shown a serious intent in aggressively pursuing growth, with a slew of smartphone launches,” says Prabhu Ram, Head of Industry Intelligence Group (IIG) at CMR.
Another analyst, Faisal Kawoosa, Founder of techARC echoes what Prabhu emphasized upon that, “Realme has definitely entered into the virgin territory that was enjoyed by Xiaomi. There was perhaps a perception that nobody can replicate what Xiaomi did, which Realme has proven wrong. It has proven that there is scope for more players.”
Indian smartphone market continues to be the fastest growing market, as it also became the second largest market surpassing the US in Q3’18. With smartphone market slowing down in China, India is naturally the next growth engine for brands to find volumes and growth. As a result, it continues to attract new players with online channel as an entry strategy every quarter.
Upasana Joshi, Associate Research Manager at IDC India said, “Realme in its opening quarter of Q2’18, started gaining momentum with Realme1, thus contributing to the overall growth of online channel in India. With its aggressive pricing and competitive specifications, Realme with its new Realme 2 and Realme 2 Pro series entered the top 5 online brand list in Q3’18. Up till now the brand has been able to create a space for itself in the online channel with powerful specifications at the back of affordable prices.”
Challenges for Realme
Having said that, offline channel cannot be ignored for its continued relevance as it accounts for nearly 60% of mobile market in India. It is essential for any brand to foray into the offline counters for long term growth and survival. Realme has recently announced its entry into offline too, initially by partnering with Reliance Digital. This is at their advantage as most of the consumers prefer touch and feel of the device before making the final purchase. Also, tremendous opportunity lies in smaller towns and cities for such brands to be present and harnessing volumes through retail counters.
Also Read: Realme U1 Review
“As a customer centric brand, we will continue to focus on being a strong ‘value for money’ proposition. Within just 6 months of its inception, Realme has received tremendous love and support from customers across. If that is seen as a good competition to the other brands we are happy to accept it,”Madhav added.
“After Realme 1 & 2, we have not seen the product getting great response. Though, for the recent launch also they claimed to have sold 200k in just 5 minutes. But, the feedback I am getting from multiple stakeholders is that the product quality is gradually dropping than the first launches. In that case, it might not be able to affect substantially Xiaomi’s territory,” says Faisal.
Explaining the concept further Upasanamentions that, “It will be crucial to see how Realme performs in the offline channel in the coming quarters, as other incumbents like Xiaomi have already laid strong footprints in the previous quarters and are continuously growing with its preferred partner program and opening of Mi stores in rural areas. Another important factor would be the high decibel promotional activities and community building programs which is essential to get registered in consumer mind share as is done by Xiaomi and other offline heavy players like Vivo and Oppo.”
Challenges for Xiaomi
“As Xiaomi grows in scale and challenges Samsung at the top, it would need to be wary of potential challengers such as Realme, who are persistent and ambitious,” says Prabhu. Realme has kept its tasks simpler, do what legends did, focus on price versus specification war, give value for money, and increase presence on social media and other available platforms but, in the long run the brand has to shift its focus majorly on the rural areas to increase its dominance and challenge the might of Xiaomi in India.
Xiaomi must also be worried by the aggressiveness of Asus and Nokia in the mid-segment in 2018. The problem for Xiaomi is that it cannot go and enter the territories of Oppo and Vivo and on top of it there’s Samsung too to play the spoilsport.
Realme is targeting the same price bracket in which Xiaomi has been a king, i.e, from Rs 5,000 to Rs 15,000 but, Xiaomi’s still the leader amongst online smartphones seller and having the largest market share in India currently. Xiaomi’s another advantage is that it has diversified into other segments as well such as TV and IoT devices. Similarly, Xiaomi has invested a lot in the rural expansion getting to the hearts of India, i.e, villages and towns.It would be interesting to see how “real” Realme will perform in the long run especially in the rural belts of the country coupled with efficient after sales services because that will ultimately decide that who will be the king of smartphones in budget and mid-segment bracket in 2019.We did reach out to Xiaomi for their comment but they refrain from commenting.