Indian Brands Conquer Chinese Companies In Wearable Market

Indian brands are gaining dominance in the wearable devices market, causing a negative impact on Chinese manufacturers.

The shift is attributed to the increasing manufacturing of wearables in India, leading to reduced orders for Chinese factories.

Major Indian brands like Boat and Gizmore are producing most of their products locally, specifically in audio and smartwatch categories, through electronics contract manufacturers such as Dixon Technologies and Optiemus Electronics.

India has overtaken China to become the largest market for wearables globally, with domestic shipments experiencing an 81% year-on-year increase in the first quarter of 2023, according to IDC India.

The market tracker predicts that India will ship 131 million units in 2023, surpassing all other countries. Homegrown brands like Boat, Noise, and Fire-Boltt hold approximately 75% of the market share by volume.

The Indian government’s Phased Manufacturing Programme (PMP), implemented in April 2022, has further encouraged the manufacturing of wearables in India.

With a 20% basic customs duty imposed on completely built-up (CBU) imports from April 2023, local assembly has helped maintain the low average selling price (ASP) of wearables. The ASP is expected to decline further to $23-25 by the end of 2023.

Chinese factories, particularly those based in Shenzhen, have seen a significant decline in orders, impacting small and medium-sized wearables manufacturers.

The dependence on Chinese factories is diminishing as Indian brands expand their manufacturing capabilities.

However, India still relies on importing components from China, and Indian brands often work with integrated design houses (IDH) in China for certain technologies and product introductions.

Indian brands are gradually taking steps to increase domestic value addition and reduce reliance on China.

Electronics contract manufacturers like Dixon and Optiemus are ramping up their capabilities in India, including printed circuit boards production.

While Indian brands have the capability for product conceptualization, design, and engineering verification tests, there is still a need to develop these processes further.

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The rise of Indian brands in the wearables market are the result of Indian government support, initiatives like ‘Make In India’, ‘AtmaNirbhar Bharat’ and so on.

The increasing demand of the Indian brands has disrupted the Chinese manufacturers’ dominance. Consequently they are facing reduced orders and factory closures in China.