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Chinese Phone Companies To Strengthen Accessory Business

Chinese handset companies plan to strengthen their accessory business to drive revenue and profitability in India after having captured a majority share of the smartphone market.

Xiaomi, the biggest smartphone seller in India, has been building its accessory and internet of things (IoT) ecosystem business on top of its handsets and smart TV products. Realme and OnePlus are preparing to amplify their focus on accessories, while Vivo is set to enter the segment next year.

“In 2020, we want to be a tech lifestyle brand and not just a smartphone brand,” Madhav Sheth, chief executive officer at Realme India, toldET. “We will keep on exploring various categories… We will get into different accessory segments. We already have general accessories like chargers and cables.”

Sheth said accessories could be a bigger revenue opportunity for Realme in 2020. “My target is 5% of total revenue by 2020,” he said.

India’s market for accessories such as cables, earphones, chargers and power banks is expected to be close to ₹9,577 crore in 2019, but 70% of the market is grey and unorganised, according to industry estimates. The market is expected to reach $4 billion (over ₹28,000 crore) by 2026.

OnePlus, which is India’s largest premium smartphone seller, is looking to enter new categories of accessories. Carl Pei, co-founder of OnePlus, told ET that the accessory business is doing well for now, but the company can do better.

“We need to invest more of our attention to it and create more innovative products. Over the last two years, it has become more business as usual. So, if we were to spend more time and effort, I think we can break through once again,” Pei said.

Analysts said profitability is higher in the accessory business, with margins of as much as 35%, and handset companies can use the opportunity by launching their own products.―Wired Focus

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