Acer pulls out of the world’s second largest smartphone market

We should’ve seen this coming, to be honest. India has surpassed the US to become the second largest smartphone market in in the world, and that’s why so many manufacturers have been flocking to the country. The competition has increased dramatically, and without a proper grasp of the particularities of the Indian market, you’re bound to be forced out of the playing field. And that’s exactly what happened to Acer.

India has over a billion people, and the use of smartphones among those people is increasing at a rapid rate. 4G is finally replacing 3G, and as the demand for affordable smartphones skyrockets, especially among the nation’s youths, major manufacturers have been rushing to get in on the action. However, when you have electronics giants battling to remain pertinent, it’s inevitable that some will be pushed out of the game.

Acer’s presence in India may have a relatively long history – after all, the company started selling smartphones there six years ago – but the Taiwanese company has announced that it will be pulling out of the Indian market, at least for now. With Chinese OEMs dominating the market, even big names like Samsung and Apple seem to be struggling to stay competitive. And given Acer’s range of products (or the lack thereof), closing its businesses in India may make sense.

As Harish Kohli, Acer India’s managing director, explains, India’s nascent market is very much price-centric. Affordability, in many cases, supersedes functionality:

Today, mobiles have become a commodity from a price-point basis, rather than an experience basis. There are very few products based on experience. When you are into that kind of a space, it is a decision you need to take, whether to produce a quality product and bleed or just copy others and make a product for a particular price-point.

Interestingly, Kohli also adds that because of the government’s Make in India initiative, larger electronics brands find it harder to compete in the market. That may be true and could explain why corporations like Samsung and Apple have been performing poorly compared to companies like HUAWEI or Xiaomi (that is, in addition to the obvious price difference).

However, in Acer’s case, a lot of it has to do with its understanding of the Indian market. The successful brands – vivo or HUAWEI – have been taking advantage of so-called flash sales, something that have worked well with Indian consumers for quite some time. Acer, on the other hand, didn’t do much to attract online consumers. That lack of a clear grasp of the unique characteristics of the Indian market may have been the primary cause behind Acer’s withdrawing from the world’s second largest smartphone market.