Chinese smartphone maker Realme introduces its new smartphone Realme X2 Pro in Beijing in October 2019 Photo: CNSPhoto

China's smartphone industry chain may accelerate its shift to India amid the outbreak of the novel coronavirus, as the emergency has taught companies the important lesson of risk diversification.

"Our supplies to the Indian market are not affected by the novel coronavirus pneumonia, as we have established manufacturing facilities in India and directly supply our clients from the US, Japan and South Korea," said a representative of original design manufacturer (ODM) Wingtech Technology, based in Zhejiang Province.

Wingtech has formed a huge industry layout from chip design and semiconductor packaging tests to communication terminals. Media reports said it is the ODM of Chinese brands including Huawei, Xiaomi and OPPO.

Attracted by the huge market potential and cheap labor force in India, China's smartphone brands have been lured to the market to grab a piece of the pie and this is driving the shift of smartphone parts suppliers.

Realme, a rising Chinese smartphone brand with a key focus on the Indian market, had a market share of 16 percent in India, ranking fourth, according to an industry report issued by Counterpoint Research in December 2019. 

Another Chinese player, Xiaomi, ranked No.1 with a market share of 26 percent.

Xiaomi unveiled on February 13 two new smartphone devices - Mi 10 and Mi 10 Pro on its own online platform because of the COVID-19 outbreak, which was also the first industry launch this year.

Speaking at the launch event, Xiaomi Founder and CEO Lei Jun said: "With adequate protection measures, we will restart production, research and development promptly."  Lei admitted that Xiaomi's supply chain has encountered pressure.

Xiaomi has opened seven plants in India, Manu Jain, in charge of Xiaomi India, said recently to local media. The company is closely following coronavirus epidemic evolution, while developing a diversified supply chain with most of components sourced locally in India.

Wang Shuo, chief marketing officer of Realme India, told the Global Times in a recent interview that output has marginally contracted for the moment due to logistics hurdles caused by the viral outbreak and delays in production resumption at various plants that manufacture parts for its phones back in China.

However, Realme's manufacturing and sales in India haven't sustained any remarkable impact, as over 50 percent of the smartphone components are purchased locally, though the transportation of materials from China has been delayed.

A spokesperson of another Chinese mobile phone maker OnePlus told the Global Times that its overall operation in India has withstood impact of the coronavirus, as its production in India had not stopped. 

The Chinese smartphone brand was ranked No.1 in India's premium smartphone market in 2019 by grabbing one-third of the market share, according to Counterpoint Research, while South Korea's Samsung dropped to the second position. Samsung shipments declined 2 percent year-on-year last year.

In response to the crisis, more companies may shift their supply chains to beyond China's borders to diversify risks, Ma Jihua, a veteran industry analyst, told the Global Times.

Last year, several Chinese companies announced plans to build factories in the South Asian country to meet growing market demand.

Holitech Technology, a major supplier for Xiaomi and OPPO, inaugurated its first component manufacturing plant in India in June 2019 and announced that it will invest up to $200 million over three years in the country.

The Indian factory of Holitech, headquartered in East China's Fujian Province, is mainly engaged in manufacturing modules. It is also India's first manufacturer for such product.

In March, Apple's Chinese supplier Ofilm said in a statement filed at the Shenzhen Stock Exchange that it plans to establish a wholly owned company in India to produce compact camera modules and fingerprint recognition modules, with the first tranche of investment at 31.8 million yuan ($4.55 million).

"It's a trend for China's smartphone assembly lines to shift to other markets like India and Vietnam," Ma said, noting that China is climbing up in the industry chain and showing signs of replacing the standing of Japan and South Korea.

China's panel display-maker BOE trumped South Korea's LD Display in 2019 to lead the global market in TV LCD panel area shipping, according to global information provider IHS Markit. BOE shipped 30.1 million square meters of the panels, up 23.8 percent year-on-year, it said.