HTC Quits India – Full Story Why it Happened?
As per the latest report by Economic Times, HTC is planning to pack up operations in the Indian market. The Indian market has become hyper-competitive due to the invasion of the Chinese brands such as Xiaomi, Oppo, Huawei, OnePlus, and Vivo.
As per the report, HTC India head Faisal Siddiqui, sales head Vijay Balachandran and product head R Nayyar, have resigned from the company or most likely are asked to go.
Further, there are about 70 to 80 employees who are also asked to leave the organization with some exceptions like the current CFO. HTC is packing the operations of mobile division and has already stopped production of mobiles in India for almost a year.
Recently, the brand launched the Desire 12 and Desire 12+ in the market with terrible specs and very high price. These were also received poorly in the market and with the availability of cheaper phones from Xiaomi and other brands, HTC was finding it hard to compete in the market.
There are more troubles for HTC India as there are several crores of payment which the company owes to the distributors. Also, there is a huge amount of stock in the market and with distributors which need to be liquidated.
I am still not clear if the company will continue to run the service centers or will wind up operations fully. And there are even questions like what will happen to the service support for existing handsets in the market.
Notably, the HTC distribution chain in India is managed by Optiemus Group firm MPS Telecom and Link Telecom. Adding to the woes, globally HTC is doing badly, as the company reported a drop of 68% in the earnings on the year to year basis, and plan to cut off 1500 Jobs.
So all I can say is, it is best for customers to buy phones from other brands and leave HTC for the moment till there is more clarity from the brand.
HTC is not the first victim of hyper-competition brands like LeEco, which once looked promising, failed to survive. LeEco has also packed operations in India owing to financial troubles back home and stiff competition in the sector.
Also, the ET report points out that they will continue to sell the HTC VR headset in India, but that is a negligible business in comparison to the mobile division.
Chinese companies are ruling the Indian mobile market and several players like Micromax, Lava, Xolo or Intex are facing the brunt. It is not unlikely we may see more closedowns in the coming months from some more brands.
One of the main reason for HTC not able to do well in the Indian market was a failure of the brand to offer better products at lower prices.
It continued too long with the same old strategy and rivals managed to get the upper hand.
LG is yet another brand which is doing poorly in the market and is struggling in the country. The falling prices of smartphones, cutting the margins for distributors and retailers is leading to a major shift in sales from offline to Online.
Recently, Oppo unveiled the low-cost RealME brand to counter Xiaomi which has more than 60% share of the online market. Further, brands like Asus have already changed the pricing strategy and become affordable with the launch of Zenfone Max Pro M1 and the Asus Zenfone 5z.
The mantra to survive and compete with Xiaomi in India is low-cost products, with great specs. Also, you need to kill the middleman (retailer and distributors) to make sure the products are affordable for the end buyer. Online is the way to go for brands if they want to compete with Xiaomi.
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