NEW DELHI: Having failed to capture this segment so far, Chinese smartphone brands are now trying to capitalise on the general apathy towards Indian smartwatch brands by launching feature-rich wearables, albeit in some cases at higher than average prices, to increase their currently low market shares.

Market observers said the efforts of the well-known and successful Chinese faces in the smartphone segment are visible in the form of new product launches, strengthening both their smartwatch and wireless earbud portfolios. They are positioning themselves in the premium segment and differentiating themselves through bundled offerings and advanced software that is well integrated into smartphones.

Among the brands that have recently entered the wearable segment is OnePlus, which already has two smartwatches running Google’s Wear OS on the market, priced well above the market average. These watches run on a customized Android operating system and are highly integrated with Android phones, making them compete with Samsung and Apple.

Meanwhile, top smartphone brand Xiaomi, with its sub-brands Redmi and Poco, has been focusing on lower-priced devices, with average selling prices closer to those of Indian rivals in the smartwatch segment, as part of its expansion into adjacent product categories around smartphones. Realme has an offering with ChatGPT 3.5 built-in, while budget smartphone brand Transsion directly competes with Indian brands Noise and Boat with its own basic smartwatches at lower prices.

The launches come amid an oversupply in the smartwatch market. Shipments fell 27.4 percent in the April-June quarter compared to the same period last year, due to inventory buildup of previous models and exhaustion of innovation, research firm IDC said. OnePlus, Xiaomi and Realme are the leading Chinese brands in the smartwatch segment.

The sharp decline in shipments in the first half of the year – the first ever in the smartwatch segment – came as leading Indian brands Noise, Fire-Boltt and Boat posted double-digit losses due to rising inventory levels.

However, Chinese brands are swimming against the tide. While average selling prices fell another $5 year-on-year to $20.6 in Q2, average selling prices of Chinese wearable brands were at $37.7 during the same period, causing their cumulative market share to decline from 3% in Q1 2024 to 2% in Q2 2024. In contrast, Chinese brands own over 70% of the smartphone market, while Indian brands are fringe players.

“The wearables segment is still dominated by Indian vendors, even though the Chinese are showing their efforts in launching new products. However, the struggle remains for them due to higher ASPs compared to Indian vendors,” Upasana Joshi, head of research at IDC India, told ET.

The higher prices, experts said, are a result of imports of the products from China, which are now subject to high tariffs to encourage local manufacturing. The volumes are too low to encourage Chinese brands to look for local contract manufacturers. However, that may soon change as consumers find them more attractive than Indian offerings in view of the upcoming festive season, they added.

Top Chinese brands have a firm grip on the earring segment, achieving a combined market share of 22% in the second quarter, up from 19% in the previous quarter, driven by new product launches across all price segments, according to IDC. Average selling prices for earring products increased from $19.8 in the first quarter of 2024 to $20.1 in the second quarter of 2024.

However, the segment is also dominated by Indian brands, led by Boat with a share of 34%, followed by Boult and Noise with a share of 12.9% and 9.2% respectively (as of Q2 2024), according to IDC.