Axelsen, a favourite in the match, zoomed to a 6-1 lead early on and managed to earn a 11-6 advantage at the changeover.
Olympic and World Championship silver medallist shuttler P V Sindhu suffered a shock straight game defeat against Chen Yufei of China in the opening round to crash out of the Denmark Open here. The Denmark shuttler dominated the first game completely but was sent on the back-foot by the Indian in the next two games.
Srikanth lost the first game relatively quickly but he turned the table by winning the tightly contested second game 22-20.
In the decider, spurred by a 12 point consecutive wins, Kidambi made a mockery of home support to win the game 21-7.
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In the third game, Axelsen surged to a 3-1 lead before Srikanth erased the deficit with a jump smash and led 5-3 when his rival went wide and found the net. Srikanth had lost the last three previous meetings in straight games at World Superseries Finals in 2015, India Open and Japan Open - both early this year.
The eighth seed will now take on the World No. 15 Wong Wing Ki Vincent for a place in the final. HS Prannoy too joins Srikanth in round two, he defeated Emil Holst 21-18, 21-19 to set up a clash against Lee Chong Wei.
Prannoy, meanwhile, succumbed to a series of unforced errors, losing 13-21, 18-21 to world No. 2 Korean Son Wan Ho in men's singles. Prannoy tried coming back in the second game but couldn't counter Wan Ho's skills. Saina could muster to save one match-point before losing the game 13-21.