Last week, Taiwanese firm HTC reportedly laid off around 80 of its employees in the world’s second-largest smartphone market. This included top executives like country head Faisal Siddiqui, sales head Vijay Balachandran, and product head R Nayyar. Among the 10 employees it retained are chief financial officer Rajeev Tayal.
“It has been an amazing journey we’ve taken to arrive here. We have an incredibly bright future ahead,” the company said in a statement. “It will require us, as an organisation, to be resilient and completely focused on the tasks at hand.”
HTC said it will invest in India “in the right segments and at the right time.” Besides mobile phones, the company will continue to dabble in virtual reality, augmented reality, and artificial intelligence technologies in India.
However, experts believe HTC may not have what it takes to survive in the overcrowded market.
How HTC failed
HTC debuted in India in 2009 with its Android-based Magic handset. At the time, the brand was seen as a tough competitor for incumbents Apple and Nokia, among others.
Over the years, Android smartphones became a favourite among Indians. HTC garnered many loyalists in the process—it had the third-highest brand recall among Indian consumers, according to a February 2017 report by consulting and advisory firm CyberMedia Research.
But it could not cope with the subsequent flood of new entrants, and over the last year alone it lost much sheen. By the end of March 2018, HTC’s market share in India had come to almost nil, data from Hong Kong-based Counterpoint Research show.
In the affordable sub-$150 category, Chinese brands like Xiaomi, Vivo, and Oppo now dominate, having toppled even the long-standing leader, Samsung. In the premium segment, the growing popularity of OnePlus and Apple’s attempts to woo Indians by lowering prices are driving HTC out.
“HTC was a classic user-experience phone for HTC lovers. But the reach of such customers is limited,” said Sanchit Vir Gogia, founder and CEO of research and advisory firm Greyhound Research. “You can’t expect great numbers when a company like Vivo is selling out in the market.”
Too silent for too long
Experts blame the company’s next-to-nonexistent marketing play for its failure.
“The India market is very dynamic and very competitive now. So if you want to be in India, you have to be aggressive,” said Jaipal Singh, senior analyst at market research firm International Data Corporation (IDC) India. ”Xiaomi is very aggressive. Oppo and Vivo are going all out to market their devices. (But) HTC has not been able to read the market. It has remained silent for a very long time. We haven’t heard much about its campaigns.”
In addition, HTC has not had much success selling through brick-and-mortar stores, the mainstay for sales in small towns and villages. A number of smartphone brands have developed strong offline sales strategies, which include partnering with local retailers, setting up service centres, and even opening up experience stores.
“We haven’t heard about it (HTC) coming loudly to retailers and putting across big sales and discounts,” said Singh.
Even its distributors are allegedly miffed. HTC has apparently not paid off dues or compensated them for unsold stocks. The company said it is exploring legal options to determine its course of action.