Chinese phones?! Ugh! Sounds cheap right? No not anymore. We are much beyond those days where Chinese phones were designated as cheap and bad quality products. With top multinational companies like Xiaomi, Gionee, OPPO, OnePlus and many other companies from China entering the Indian market, they have revolutionized the Indian mobile scenario. Value for Money and Online exclusivity are the new mantra of the mobile world. With the likes of established players of the Indian mobile market – namely YU (Micromax spinoff), Karbonn, Intex – rushing for cover to launch their online exclusive product, the dimensions of the mobile market has just revolutionised in the past year!
With modern manufacturing prowess with the likes of Foxconn, and the growth of top Chinese OEMS based in and around Shenzhen the Chinese tech market is blooming. In fact many of these companies are struggling to meet the demand! There may be many companies you have heard of before and many you haven’t. Either ways we are going to provide you a detailed perspective on the top wonder phones that have taken the world by storm or the way to import them to India. Sit back and buckle your seatbelts as we go on a long journey to the world of Chinese tech!
Note: Also check out our earlier guide on How to buy phones from US and import them.
Table of Contents
- Value for Money. The cost to power ratio is the top most selling factor of most Chinese tech. But how do they keep cost low when other big established players namely Samsung, Apple, Nokia fail / not intend to do so?
- Top notch manufacturing plants using the latest tech. All made possible due to bulk manufacturers like Foxconn.
- Huge R&D experience of many Chinese players namely Gionee, Ecoo. Oppo having done R&D for Samsung, Apple and many other before becoming launching their own brands.
- With the recent boom in the Chinese microchip industry with the quality chipsets introduced by Mediatek in 2014 have taken the world by storm. Established players like Qualcomm and Broadcom have been put in a stiff! One can easily say 2015 is the worst year by far for Qualcomm. With their own chips suffering due to multitude of heating issues, the timing of launch of compatibly low cost, powerful MT67XX generation couldn’t have been worse for them. Qualcomm’s loss is China’s gain because many Chinese companies have MoUs with Mediatek for providing them Chipset at subsidised costs.
- Various resellers selling Chinese phones globally (obviously charging a little premium over the selling price of the phones) via top notch couriers like DHL, FedEx. They also have warehouses in various locations in Europe and South Asia from where they ship the products. Payments are secure and done through PayPal mainly. We will provide a list of top resellers which you can check out if you want to import something from them.
How do these top Chinese companies keep the cost the phones down?
Are Chinese phones compromising on quality of other flagship models in order to keep costs down?
But do really flagships of top companies like Apple, Samsung, and Sony et al really cost so atrociously high? That’s the basic question that will help you find the answer to the above mentioned question. No they don’t!
Consider a 2015 flagship cost about $700 (approx. 44,000 INR/4,400 Yuan). This is generally the average selling price of most flagships that are launched initially. Out of this, the production cost of the smartphone is actually 20-25% of the real production cost, another 30-35% goes for marketing (a whopping amount by any sense of imagination), 20-25% are eaten up by the distributors, local retailers, transportation and distribution and ultimately the company bags its one share of 20-25% profits. Remember this is a general estimate and it varies from brand to brand.
The Chinese brands has an edge over their competition over here which helps them to keep the cost down. Cost of marketing is almost negated as they take up Social media, Fan forums and Contests to build a strong fan base pre-launch. Their take on online exclusivity as the modern sales model has also reduced the middle man profits to a huge extent. Finally, they keep a lower share of profit on each phone – about 10% instead of 20-25%. They rely on the mantra of selling in bulks to generate the same amount of profits which other global leader try to generate in a lower no of sale.
Secondly they have a different approach to the production of their smartphones too. On contrary to big manufactures like Samsung, Sony who believe in manufacturing phones in bulk i.e. in few billions, most if not all Chinese companies believe in manufacturing depending on the market demand. They manufacture few millions of each phone model in each round. And this has led to the advent of flash sales where anywhere between 20 thousand to 100 thousand phones are sold in a go. This form of manufacturing helps them to keep the cost down too.
Once you manufacture a few billion phones in bulk, you would need to pay the present market rate for peripherals i.e. the SoCs, RAM, Camera modules, Sensors et al but when you are manufacturing in batches, you pay the prevalent market price depending on the market rate. We all know how prices of electronic goods come down with time. And this is where their strategy works. For example, when Xiaomi introduced Mi4 in 2014, the Snapdragon 801 was the leading SoC in the market but now in 2015, Mi4 is still selling like hot cakes and the top of the range 801 SoC has been replaced by Snapdragon 808/810. Hence their price has also slashed down by a big margin and thus Xiaomi starts making more profit. Pretty much the same with OnePlus One and other Chinese phones. Initially the profit is low and with time margins increase in spite of keeping costs low to the consumers. Read more about it here: How do Device Vendors Make Profit out of the Mobile World?
Can you name a few top Chinese companies whom I can trust?
Yeah absolutely! Here are a few that comes to my mind as soon as you ask me this question:
You may have heard about many of these companies before. So now comes the real list, which feature companies many of which you probably haven’t heard off before. But we can assure you they build some killer devices! Even if you haven’t heard of any of them before, no worries, there’s always a first time.
You might have also used or been using phones of three of the companies named above namely Meitu, Mlais and Coolpad. Micromax Canvas Selfie, iBerry Auxus Beast and YU Yureka are rebranded models of Meitu M2, Mlais M52 and Coolpad F2 respectively.
Did we miss out on any companies which you feel deserves to be on this list? If so feel free to air your views in the comment section below.
I want to buy one of their phones! But how to go about it?
In order to buy, you have to drop onto one of these Chinese reseller websites like Merimobiles, PandaWill and place the order. But is it that simple? No. If it had been so, we wouldn’t have been penning this down for you.
Here are some of the top Chinese resellers below:
- Honorbuy.com (formerly Xiaomishop.com)
If you think there’s a website we missed out kindly name it in the comment section below sharing your buying experience with the site. We will definitely add it to our list later.
Once you have selected the phone you want, and also found out the cheapest option at one of the resellers mentioned above, you think your job is done and the phone is damn cheap! But before you bring out the calculators and change the USD into your own currency and start celebrating seeing the price, you must stop right away! This isn’t the price you are going to pay. There will be a whole lot of price additions to one you see now. Let’s see what all are there:
- Shipping cost: In most of the websites, you will get two options. One option is Post and that’s the cheapest (but which we wouldn’t recommend – stay tuned to find out) and the other one is shipping via top courier companies. The shipping cost will albeit vary from country to country. On an average, it is in between $20 to $60. Shipping to India will cost around $20-$30 if you are shipping through DHL, FedEx.
- Currency conversion rate: First of all you need to have a credit card for shopping with any one of these Chinese resellers. All the websites mentioned above support secure payment via PayPal. But since you are paying using a different currency than what is used in China i.e. Yuan Renminbi, you need to pay a separate conversion rate. PayPal provides the option to handle the currency conversion on your behalf and for that they charge about 4.5%. Your credit card company might be charging lesser. In that case you can choose to pay in the currency seller ask while paying via PayPal.
- Import Duty: Import duty (or VAT in Europe) is the most unpredictable among all the added costs! Technically, the import duties on smartphones is around 6% in India and most other things (including tablets) is around 28%. But sadly, no one ever knows exactly how much the import duty you might need to pay. At least I haven’t been able to figure out exactly how does the Custom official charge import duties on products. It depends on your luck! But the few important points that they see are as follows:
- The cost of the electronic gadgets that is passing through the customs. If it’s a flagship device which you are importing then you would need to pay a higher custom duty as compared to a budget device. Generally the custom charges about $20-50 (approx. 1200-3000 INR) for flagship devices.
- If you are importing a phone which is high on demand, the customs might charge you more. Thus if you are importing something like Xiaomi Mi Note the customs will end up charging you higher.
- Customs duty also varies depending on the brand of the device your are importing. Maybe they will charge you more for a HTC or Xiaomi device than for an Elephone device.
But coming to the point, the customs duty is the primary reason why we would recommend FedEx, DHL over Postal service. DHL, FedEx provides an option for clearing the customs for you on your behalf and you need to pay the courier guy the custom charges when you receive the product. On the contrary, Postal service doesn’t handle customs for you. In case you are importing a device from China, the China Post will drop the package to the Customs office on the border. Then the customs department sends you a letter (mind it, they sent it via post) confirming receiving a device and informing you that it is sitting with them for Customs duty. Depending upon, where you are from, you either have to visit the customs office or have to write a letter to them confirming the order and asking them to clear the customs. So you can easily understand this is a long process! The package ends up spending few weeks or so in the Customs office. This is the second reason why we don’t recommend Postal Service. FedEx or DHL delivers the package to your within 3-4 weeks and you don’t have to tackle all the hassles of customs! Of course, the experience with DHL/FedEx hasn’t been flawless, but it’s still much better than the Postal service.
So finally you end up paying about an $80-$100 more over the price that you saw on the website.
I’m done with importing and stuff? But what about warranty?
In most cases, you won’t be getting the company warranty, because most Chinese companies provide country specific warranty i.e. for China only. But there is a way out, albeit a tough one. For warranty issues, you would need to ship the product back to the resellers from where you had bought and they will handle the rest. Mind that you will need to pay the shipment charges back to your resellers in China, but most resellers don’t charge for the return shipment though. Check with the reseller you purchased from for more details.
There are a few companies like Meizu, IUNI to name a few who provide international warranty and you would need to ship the product back to the company directly without going through the resellers. This will fasten up the whole process. But honestly speaking, you won’t need to worry about warranty issues! How many times have dropped down to a service centre for warranty issues in the recent past? It generally happens these days due to the multiple rounds of checking that each device goes through. But if you’re someone who worry a lot about warranty, the whole process is just not for you.
In spite of all the hassles and extra charges associated with importing a device from China is still not a bad option. In fact, it’s a great one if you don’t have many choices of the device which you are looking for in the same price range in your country. So go ahead and make you first attempt at buying a phone from China.
Don’t forget to post comments if you have any questions regarding importing phones from China will be more than happy to help you out.
This is a guest post by Sayan Sarkar. Sayan is a tech-geek by heart who loves messing round with gadgets & gizmos. When he is not writing, he spends his time updating himself on the happenings in the Indian startup ecosystem, fine tuning and optimising other’s smartphones and walking round in the streets of the City of Joy talking about latest tech. He loves to helping out fellow customers on Amazon by posting reviews when he is free and features among Top 100 Reviewers on amazon.in. You can get in touch with him on Facebook or Google+ as well.