It has been THE rivalry of the Indian smartphone market over the past year. One of them is the top smartphone brand in the country, the other the fastest growing one. Many of their products seem aimed at the same audience. Their products spar against each other in different price segments. And their executives are not averse to taking a poke at each other. Heck, the brands even sound alike.
We are talking, of course, of Redmi (Xiaomi’s brand) and Realme. For most people, Redmi vs Realme is THE tech rivalry in the country. Rarely a day goes without some debate on the Web or social networks about which brand is doing better and how each is pushing the other back in one department or the other.
The truth, however, seems to be that while both brands are doing well, neither is actually hurting the other too much. Not yet anyway.
On the face of it, that sounds like an outrageous statement, doesn’t it? We mean, come on, the brands are offering products that offer near-identical features at near-identical prices. They target each other and well, we ourselves get flooded with readers asking us to compare Realme and Redmi products, as they cannot make up their minds – the Realme XT and the Redmi Note 8 Pro, for instance.
So, obviously, when there are such comparisons being made, surely the two brands are at each other’s throats, right? Well, that seems logical enough. But if you look at IDC’s statistics for the Indian Smartphone market since Q2 2018 (when Realme first appeared on the radar), the tale one gets is not exactly of two brands grabbing share off each other. For the sake of simplicity, we are considering IDC’s shipment rather than market share figures, because shipment figures are absolute and not a ratio (which market share is).
Now, if the two brands are real rivals, then then the growth of one should be reflected by a dip in the other – after all, if they are fighting for the same segment, if one does well, it should logically be (mostly) at the cost of the other.
But has that happened with Realme and Redmi? Here are IDC’s data for shipments by leading brands in the Indian smartphone market from Q1 2018 to Q3 2019, the period from just before the arrival of Realme to the most recent quarterly report: (figures in million units)
Let’s start with Q2 2018, newcomer Realme shipped 0.4 million units, while Xiaomi, who had suddenly emerged as the lead player in the market, shipped 10 million. Realme released more devices in the next quarter and experienced fantastic growth, going up to 2.9 million units shipped in Q3 2018. That’s a boost of 2.5 million units. You would have thought that this would have hit Xiaomi hard. The truth, however, is that Xiaomi itself had an increase in sales – to 11.7 million units. Yes, there will be those who will say that both companies would have done better if the other was not in the market, but the fact is that the growth of one did not seem to come at the cost of the other. Q4 2018 did see Xiaomi’s sales dip a little to 10.5 million units, but Realme’s dipped too, to 2.5 million units. Indeed, the period saw the Indian smartphone market itself witness a dip of sorts.
This seeming slowdown continued in Q1 2019, with Xiaomi going down to 9.8 million units, but again Realme dipped too – to 1.9 million. As the market recovered in Q2 2019, both brands witnessed an increase in shipments – Xiaomi went up to 10.4 million, Realme to 2.8 million. Finally, there were the Q3 2019 figures which came in recently. As per them, Realme more than doubled the number of handsets it had shipped in the previous quarter, going all the way to 6.7 million units. You would have thought that would have hurt Xiaomi, right? Well, Xiaomi too actually had a very successful quarter, shipping 12.6 million units!
There will be those who will point out that the gap between the shares of the two brands is closing – from a massive 9.6 million units in Q2 2018 to 5.9 million units in Q3 2019. But the stark fact is that at no time did Realme’s growth seemed to reduce Xiaomi’s numbers. Or vice versa. It wasn’t as if one brand was eating into the other’s sales, because both the brands seem to be expanding and contracting (albeit by different proportions) at the same time. Yes, it can be argued that both would have done better without the other in the picture, but the same can be said of other brands, and these are supposed to be rivals fighting. We do not hear of a Xiaomi-Vivo or a Samsung-Realme rivalry – we hear of Xiaomi-Realme!
And yet Realme’s best-ever quarter actually coincided with Xiaomi’s best-ever quarter (Q3 2019). And so did its worst (Q1 2019).
Sounds odd? Well, that is because the rise of both brands (and even the likes of Oppo and Vivo to an extent) has come not at the general cost of each other, but another player.
Or actually, call it a group of players – one that comes under the heading “Others.” This category accounted for 11.1 million units in Q3 2018, and one year down the line is down to 5.9 million units. That is a dip of almost 5.2 million units. What is, however, really intriguing, is that these “others” were generally dominant players in the very area in which Realme and Redmi do well – the lower and mid-segment. “Others” might not sound very important but take a closer look at the brands in there – Motorola, Nokia, Honor, Huawei, Asus, LG, Micromax, Xolo, Transsion, Lava, Gionee, and many others – and you will understand what we are speaking about. With a few exceptions (OnePlus and Apple most notably), most of the brands in there were fighting for a share of Rs 4,000-15,000 segment. The very zone that Realme and Redmi have made their own.
Go right back to the beginning of 2017 and the mid- and lower-priced segment of the Indian smartphone industry was being fought over by the likes of Honor, Motorola, Lenovo (yes, it was a formidable player, remember the K3 Note?), and Micromax was still a force to reckon with. Almost all those brands have been consigned to the backdrop, and Xiaomi and Realme have pretty much gobbled up their territory. The “others” category at one stage used to comprise almost a third of the market – now it accounts for about 12 percent, and that is about 12 percent in Q3 2019, which saw a record 46.6 million units. Interestingly, the figures of most of the “others” have tended to dip even as Realme and Redmi rose – the likes of Motorola, Honor, and Micromax indeed have almost dropped off the radar in market share terms, going well below the 2-3 percent point.
Interestingly, Redmi and Realme are not the only ones to benefit from the fall of “others” in the lower and mid-segment. A closer look at the IDC report for Q3 2019 will reveal that the bestsellers of the likes of Vivo and Oppo also came from this very segment. A section that used to account for almost a third of the market is now down to about a tenth, although some are hoping for a revival, thanks to the return of Nokia and a flurry of new handsets from Motorola. Some, however, feel that too much ground has already been conceded and many brands are unlikely to be able to make it back to any position of significance.
In fact, such is the gap between the top five and “others” that the brand at number five, Oppo, shipped 5.5 million units in Q3 2019, which is almost as much as ALL the “Others” put together, 5.9 million. Rumour has it, that the brand at number six is actually Nokia, but its share is not even 2 percent of the market and its shipments below a million units. A far cry from Q1 2018, when “others” actually sold more units than the number one player, Xiaomi – 9.2 million against 9.1 million!
Of course, all this is surmise based on a very quick look at figures. We do not have the sort of detailed data that would let us draw more concrete conclusions, but we suspect that the rise of Realme has hit “Others” much harder than it has Xiaomi. Xiaomi would not be registering its most successful quarter if its rival was taking chunks out of its share. Yes, Xiaomi’s rate of growth might seem slower than in the past, but that inevitably happens as one’s market share increases – rapid growth becomes rare once one steps past the 15 percent market share in the Indian smartphone market, as per most experts.
Yes, they might be rivals in every sense of the word, but as of now, Realme and Redmi (and indeed, Oppo and Vivo) are not really scoring off each other in the market. They are feasting on the remains of Others. And once they have finished, they might turn on each other. But as of now, neither of the Me (or the Mi) leaves the other in the red.