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First casualty of Chinese invasion! HTC hangs up on India smartphone operations

The premium phonemaker became the first casualty of Chinese invasion of Indian smartphone market.

, ET Bureau|
Updated: Jul 19, 2018, 05.29 PM IST
The Taiwanese firm, however, is not yet dissolving the Indian operation completely. (Image: Company website)
KOLKATA: Premium smartphone brand HTC is exiting the Indian market, becoming the first major casualty of the Chinese invasion of Indian smartphone market.

HTC India’s top management, including country head Faisal Siddiqui, sales head Vijay Balachandran and product head R Nayyar, have put in their papers, three senior executives told ET.

The company has asked its 70-80 member team to leave with a few exceptions such as chief financial officer Rajeev Tayal. It is also snapping all distribution agreements in the country after halting local manufacturing for almost a year now, they said.

The Taiwanese firm, however, is not yet dissolving the Indian operation completely. “It plans to sell virtual reality devices online with Taiwan completely controlling Indian operation. This will be like an extremely small business,” one of the executives said.

Another executive said HTC may look at re-entering Indian smartphone market as an online exclusive brand, but that will be only after it’s able to turnaround sales globally as the brand is struggling in several markets. “As of now, it is quitting,” he said.

A HTC spokesperson said the company will continue to sell its smartphones in India. India being an important market for HTC, the company will continue to invest in the country in the right segments and at the right time, she said in an email response to ET.

The recent reduction in workforce in the India office is designed to more appropriately reflect local and regional market conditions, and will help HTC more effectively advance into a new stage of growth and innovation, the spokesperson said. “There are still more than ten employees in the India office providing full functionality,” she said.

However, the company may run into more trouble in the country with some distributors planning to take legal action for non-payment of dues and not compensating for the stock in trade pipeline.

“HTC owes money in several crores,” said a distributor of the brand. HTC was nationally distributed in India by Optiemus Group firm MPS Telecom and Link Telecom.

The HTC spokesperson said it is aware of the potential dispute but is yet to comment before it receives full detail. “We are working with channel partners to ensure no disruption on business and service to our customers,” she said.

Globally, too, HTC is struggling with sales falling by nearly 68% year-on-year in June, in the biggest slump in more than two years, and the company announced plans to lay off 1,500 workers, or one-fifth of its total workforce, Reuters reported recently.

The company had launched two smartphone models in India last month. “But without any marketing, sales has been negligible,” said an executive of one of its distributor.

HTC has less than 1% share in India, as per Counterpoint Research. Samsung, Apple and China’s One-Plus dominate the Rs 30,000-plus premium smartphone market in India, together accounting for 95% of the market, according to the Hong Kongbased researcher.

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