BackAmid lockdown, India's smartphone market grew 4% in Q1: Report
Due to the nationwide lockdown, the market is set to see further decline, the report statesXiaomi consolidated its number one position with 30% market share and 6% YoY growth in Q1, report says
PremiumWith the impact of covid-19 starting to feel late in the first quarter, smartphone shipments in India also began to dwindle, leading to a modest 4% year-on-year (YoY) growth in Q1 2020. A total of 31 million units were shipped in first quarter, says Counterpoint’s Market Monitor, published April 24. In comparison, India smartphone market grew 7% YoY in Q4 2019.
Due to the nationwide lockdown which was first imposed in last week of March and later extended till May 3, the market is set to see further decline. It will only recover in third quarter, resulting in an estimated 10% decline in overall smartphone shipments in India in CY2020, the report states.
“With social distancing norms, factories will be running at lower capacities even after the lockdown is lifted. Consumer demand will have a larger impact on smartphone sales, as people will focus on saving and therefore limit discretionary purchases," Prachir Singh, senior research analyst at Counterpoint Research said in a press statement.
The impact on entry-level smartphones will be greater. Singh points out, demand for the entry-level smartphones will decline in the near-term. Even if the situation stabilizes by mid-year, people may hold-off purchasing until the festive season.
Riding on strong demand for Redmi Note 8 series, Xiaomi consolidated its number one position with 30% market share and 6% YoY growth in Q1 2020. This was their highest ever market share since Q1 2018. Rival Vivo retained the second position for second consecutive quarter, but its market share dropped from 21% in Q4 2019 to 17% in Q1 2020. With 16% market share, Samsung was the third biggest vendor. Fourth placed Realme and fifth placed Oppo emerged as the fastest growing smartphone vendors on YoY basis growing at 119% and 83%, respectively.
Growing annually at 78%, Apple was once again the market leader in ultra premium segment ( ₹45000 and above) with 55% market share. Apple’s growth can be attributed to the strong shipment of iPhone 11 with discounts on Flipkart and Amazon.
According to the report, the increase in GST on smartphones to 18% from 12% will affect the margin for OEMs and it will reflect in the prices of new launches going forward. Following the hike, many OEMs including Apple, Samsung, Vivo and Realme increased prices of their existing smartphones.
Commenting on the current restriction on sale of smartphones, Shilpi Jain, research analyst at Counterpoint Research said in a press statement, “smartphones should be considered as essential items during the lockdown as people are dependent on them as a primary mode of communication. Sales should be allowed through online channels or through Online to Offline (O2O) model. This is happening in Europe and the USA where online channels still remain in service."
Once the lockdown lifts, Jain feels, OEMs will have a lot on their plate, starting with managing existing inventory across all distributor and retail touchpoints to supporting retailers sell through older inventory.
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