Chinese smartphone brands expanded their share of the Indian smartphone market in the June quarter (Q2) of 2017, continuing a trend seen over the past few quarters, shows the latest Quarterly Mobile Phone Tracker report by research firm IDC (International Data Corporation). This means brands including Xiaomi, Vivo and Oppo now have a combined market share of as high as 54%, up from 51% in Q1 2017.
Samsung of Korea continues to be India's number one smartphone brand, but its market share has fallen from 28% in Q1 2017 to 24% in Q2 2017, the report suggests.
Xiaomi continued its good run in Q2 with a quarter on quarter growth of 25%. It occupies the second position with a market share of 17%. In Q1 2017, it held 14% of the market share. Xiaomi’s success can be attributed to the company’s expansion in the offline market through Mi Homes, Mi authorised stores and big format retail stores. The other factor contributing to its good run is the success of Redmi Note 4. The company has sold over 5 million units since its launch in January 2017. With more than 2 million shipments in Q2 2017 alone, it has become the highest shipped smartphone in India in a single quarter.
Vivo, which is stronger in offline market, holds the third position with a market share of 13%. It registered an impressive quarter on quarter growth of 26% in Q2 2017. In Q1 2017, its market share was 10.5%. According to IDC, aggressive investments on marketing activities and in-shop promotions contributed to the company’s growth.
Oppo and Lenovo are the fourth and fifth biggest smartphone vendors respectively, even though their market share has declined over the preceding quarter.
Oppo, like Vivo, is big on promotion and marketing. It controls 8% of the market in Q2, even as its shipments declined by 13%. It held 9.3% of the market share in Q1 2017.
Lenovo’s poor run continued. Its shipments declined by 25% in the last quarter and the market share shrank to 7% in Q2 from 9.5% in Q1. Surprisingly, smartphones sold under Lenovo's Motorola brand fared better than Lenovo branded smartphones, posting a quarter on quarter growth of 17%.
Indian companies are eyeing a comeback
Indian companies after three quarters of continuous decline have finally made some headway. They registered a quarter on quarter growth of 18% in Q2 2017, but their overall market share is still only 15%. “Indian vendors are putting all their efforts and second half of year will be crucial, either it will see a revival of Indian vendors or emergence of new dominance in the sub-$150 (Rs 10,000) segment from China-based vendors," says Upasana Joshi, Senior Analyst, IDC India.
Impact of GST
The IDC report also provides some data on the impact of GST (Goods and Services Tax) on smartphone market. A GST rate of 12% was implemented on smartphones from July, which affected shipments in the second quarter as the focus was on clearing out the existing inventory before GST kicked in. A total of 28 million smartphones were shipped in Q2 2017. This marks a modest quarter on quarter growth of 3.7% and a year on year growth of 1.6%.
However, phone makers' decision to absorb the increased price due to GST helped to stabilise the pricing and the impact on sales.