The Indian smartphone market grew 10% annually in 2018 in terms of total shipments with Xiaomi leading the pack, even as the global market has been shrinking, according to a new report by Singapore-based industry tracker, Canalys.

India now accounts for more than 10% of the global smartphone market with a total of 137 million smartphones shipped in 2018 - up from 124.9 million in 2017.

China and the US, however, still account for a majority of the market with shipments of over 350 million and 150 million units, respectively, even though their numbers fell in 2018 as buyers in these markets are upgrading to newer phones less frequently.

The report, though, qualifies that India wasn’t the fastest growing smartphone market in 2018. Indonesia with an annual growth rate of 17.1%, Russia with 14.1% and Italy 10.0% were ahead of India in the list.

According to the Canalys report, Xiaomi consolidated its position in 2018 and remained at the top for the entire year with a 30% market share and 41 million unit shipments.

In 2017, Xiaomi had shipped 25.7 million units and was at the second position with 20.6% market share. Samsung, which was ahead of Xiaomi in 2017 with 23.6% market share and 29.4 million units, slipped to second position in 2018 with market share of 25.8%.

The slump in the Chinese smartphone market has made India a major playground for Chinese companies. India is now the biggest market for Xiaomi worldwide. The other Chinese companies Vivo and Oppo didn’t see any major shift in fortunes and continue to occupy the third and fourth position respectively.

The report also forecasts a shift to offline channels due to the new FDI rules for e-commerce stores which restricts e-commerce companies like Flipkart and Amazon from selling any product exclusively on their platform or having equity stake in seller accounts.

In an official press note, Rushabh Doshi, Canalys Research Manager, said, “The FDI policies are going to slow market development spending by these platforms, thereby denting overall online smartphone sales. There will be a see-saw shift toward offline channels this year, and many vendors will start engaging with distributors or offline retailers in a bid to protect their growth ambitions."

According to a Counterpoint Research report, published in January 2019, the online market accounted for 36% of the smartphone shipments in 2018 with a strong performance by Flipkart and Amazon.

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