Honor, a Chinese smartphone vendor that has a negligible presence in India, announced a re-entry into the South Asian country with a strategy that is more aligned with the Indian government's attitude towards China-based vendors amid tighter scrutiny against Chinese investments.
According to multiple reports by Reuters, Mint, and The Economic Times, Madhav Sheth, former Realme India CEO and incumbent CEO of HonorTech, said Honor-branded smartphones will return to India in September under a licensing agreement. Under the deal, the Honor brand is licensed by Gurugram-based PSAV Global, of which Sheth is one of the two partners.
Sheth said that instead of operating as a 100% Chinese-owned company like Oppo, Vivo, and Xiaomi, HonorTech is a 100% Indian equity-owned company, adding that he is trying to disrupt the industry with this type of joint venture and operating under the licensing business. Sheth said the route he opened up would entice other brands to follow suit.
Besides, Sheth said that all the phones of HonorTech will eventually be manufactured in India, and the company is working on setting up manufacturing units and talking with local manufacturers eligible for the Production Linked Incentive (PLI) schemes for large-scale electronics manufacturing. HonorTech will launch three mid-range smartphone models as early as September.
HonorTech's way of re-entry in India comes when the Indian government is reportedly urging, even forcing, China-based vendors to form joint ventures with Indian partners for their operations in India. Xiaomi was reportedly considering introducing an Indian partner, a rumor that Xiaomi denied.
According to the Bureau of Indian Standards, no Honor-branded mobile phone model is currently registered under the bureau, which may mean there may still be months away before the launch of the Honor smartphones in India. It remains unclear whether Honor's products will be unveiled by the festive season that falls from October through November.
Sheth said Honor is targeting a market share of 5% by the end of 2024 and a revenue of INR100 billion (US$1.2 billion). Reuters quoted Neil Shah, vice president at Counterpoint, saying that India was ever a focus market for Honor until 2020 when it was spun off from Huawei. Huawei and Honor shipped about 300,000 smartphones in India in 2020 and stopped shipping smartphones in India after the first quarter of 2021.
Source: IDC, August 2023
