India smartphone market grew 18% in Q1; revival to take longer

The electronics and consumer durables market in India may see a significant slowdown because of the second wave of covid-19 infections in the country. Sales of electronic products such as smartphones and laptops and consumer durables such as air conditioners and coolers will take a hit, according to industry experts. Market research firms have also been re-evaluating their expectations for the coming quarters.

“The April-June quarter is expected to face growth challenges under the weight of the second wave of infections. However, the high shipments from the first quarter should be able to suffice for the immediate demand,” said Navkendar Singh, research director, client devices, at International Data Corporation (IDC). “However, IDC estimates the impact to be less pronounced compared with last year, with factories being operational today and only limited restrictions on logistics/ transportation and state-level lockdowns instead of a nationwide lockdown,” he said.

In its quarterly report, IDC noted that the Indian smartphone market grew 18% year-on-year in the first quarter of 2021. However, the 38-million-unit shipments the country saw in the first quarter were 14% lower than the fourth quarter of 2020.

The recovery in 2021 may not be “as smooth as expected earlier” and, while the industry will grow in the second half of the year, the degree of that growth will be “restricted” as people lower their discretionary spending, Singh noted. Supply constraints and anticipated price hikes in components in upcoming quarters will affect the market, he said.

Lower discretionary spending will affect recovery once the lockdowns are eased, echoed Nilesh Gupta, director of Mumbai-based retail chain Vijay Sales. The April-June period is important for consumer durables such as air conditioners, air coolers, and this is the second year in a row when retailers have been forced to shut shops during this time, Gupta said.

“When lockdowns were lifted last year, consumer durables picked up immediately. This year a lot of families have experienced losses and the overall mood is somber. So, I think people are going to play it safe. The biggest fear we have is that the bounce back will take longer,” he said.

Lockdowns during key sales periods for two years in a row may also affect consumer behaviour in the long run, noted Gupta.