While India’s overall smartphone shipments declined by 51 percent, compared to the same period a year ago, to just over 18 million units in Q2 2020, the market is starting to return to normal. This according to the latest research from Counterpoint’s Market Monitor service
While India’s overall smartphone shipments declined by 51 percent, compared to the same period a year ago, to just over 18 million units in Q2 2020, the market is starting to return to normal. This according to the latest research from Counterpoint’s Market Monitor service. Here are the key highlights:
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Pent-Up smartphone demand
The nationwide lockdown imposed by the Indian government to combat COVID-19 resulted in zero shipments during April. The COVID-19 pandemic wiped-out almost 40 days of production as well as the sales of smartphones due to the nation-wide lockdown. However, there was a pent-up smartphone demand after April and May’s lockdown which pushed the June 2020 volumes to pre-COVID levels. In June 2020, Indian smartphone shipments registered a mild decline of 0.3 percent YoY. For now, the smartphone user base in India beyond the half a billion mark.
Chinese brands fell from 81 percent in Q1 to 72 percent in Q2 2020
The contribution of Chinese brands fell to 72 percent in Q2 2020 from 81 percent in Q1 2020 and commenting on how the pandemic has been shaping the competitive landscape, Shilpi Jain, Research Analyst at Counterpoint Research said, “This was mainly due to the mixture of stuttering supply for some major Chinese brands such as OPPO, Vivo and Realme, and growing anti-China sentiment that was compounded by stringent actions taken by the government to ban more than 50 apps of Chinese origin and delay the import of goods from China amid extra scrutiny. This all resulted from the India-China border dispute during June.”
“The quarter was marred by both demand and supply constraints which led OEMs to rethink their go-to-market strategies. Additionally, the last week of the quarter saw components being held up at customs, which also impacted the supply chain”, added Prachir Singh, Senior Research Analyst at Counterpoint Research.
Xiaomi surviving the storm
It’s not just the lockdown and supply china constraints that shaped the smartphone market. The recent times saw a huge rising negative consumer sentiment towards China, but despite that Xiaomi continued to lead the Indian smartphone market in Q2 2020. According to Counterpoint handset models like the Redmi 8A dual, Redmi Note 8 Pro, and Redmi Note 8 continue to attract consumers’ interest due to competitive pricing, strong value propositions, and good channel reach.
During the quarter, the brand entered the ultra-premium segment with its flagship Mi10 5G device which was priced at over INR 45000. The company also continued to expand its IoT ecosystem portfolio with the launch of a smart vacuum cleaner and Redmi Earbuds S. according to experts, good planning, customer focus, and timely actions to respond to the COVID-19 situation are some of the strategies that worked in its favor.
Samsung taking a huge leap
During this quarter, Samsung recovered fastest as it reached 94 percent of pre-COVID levels becoming the second largest brand in Q2 2020. The brand closely followed Xiaomi, increasing its share to 26 percent in Q2 2020 from 16 percent during the last quarter. It was the first brand to reach almost full manufacturing capacity by the end of June.
The company revamped its M-series and launched it in offline channels that helped Samsung restore its position in the Indian market. Samsung also has a diversified supply chain compared to its competitors, which helped it to maintain a steady flow of components.
Other Chinese players
Chinese handset maker, Vivo was also able to manage post lockdown demand well as it exited the quarter with 60 percent pre-COVID levels. Additionally, it also managed to ramp up its production output post lockdown. The launch of its flagship V19 and adding more smartphones like Y50, Y30 to its Y-series portfolio helped the brand to recover fast in June.
Realme too maintained the fourth spot, though its share declined to 11 percent as it faced manufacturing constraints due to the shutdown of the factory for almost all of May.
Meanwhile, OPPO also struggled during the quarter due to supply constraints, it managed to gain mind share by entering the ultra-premium segment with the launch of its 5G flagship, Find X2 series. It also revamped its affordable A-series to broaden consumers appeal in this quarter
OnePlus regained its top position in the premium market with its newly launched OnePlus 8 series, which also comes with 5G.
Apple’s India-made iPhone 11
Meanwhile, Apple remained the leading brand in the ultra-premium segment which was driven by iPhone 11 shipments, though it lost some share to OnePlus in Q2. In fact, Apple has now started assembling its flagship iPhone 11 at the Foxconn plant near Chennai, India. Retail sources tell CNBC-TV18 that iPhone 11 with ‘Assembled in India” tags are now available in stores. As of now, users will not see the drop in price but it is believed that we might see this happen eventually.
Worst hit segment: Feature phone market
As of now, India is home to more than 350 million feature phone users and the feature phone market was the worst affected segment as it declined by a massive 68 percent YoY in Q2 2020 as consumers in this highly cost-sensitive segment tried to save money by reducing discretionary purchases. In the near-to-mid-term, this could actually boost the used and refurbished mobile phone market.
Government’s PLI scheme
Experts believe that huge opportunities lie ahead for India to become a manufacturing and export hub for handsets owing to the Indian government’s push. After the launch of the PLI scheme in April, OEMs are planning to set up production bases in India.