Smartphone Shipments in India Slip 51 Percent YoY in Q2, Chinese Brands Lose Share: Counterpoint

Smartphone shipments in India declined by 51 percent year-over-year (YoY) to just over 1.8 crore units in the second quarter of 2020 due to the coronavirus-led lockdown, Counterpoint Research said on Friday. Xiaomi continued its leadership in the quarter despite facing supply constraints owing to COVID-19 pandemic and rising anti-China sentiment. However, Samsung is said to have seen the fastest recovery from the pandemic and reached 94 percent of pre-COVID levels in the country. The South Korean company moved from 16 percent market share during the March quarter to 26 percent.

The smartphone market is starting to reach normalcy after facing zero shipments due to the national lockdown in April and registering a mild decline of 0.3 percent YoY in June, according to a report by Counterpoint Research. The firm said that the pent-up demand as well as a push from brands helped the market improve its position despite resulting in the significant dip from its last year performance.

Xiaomi managed to retain its domination in the Indian smartphone market in the second quarter with a market share of 29 percent, up from 28 percent reported in the same quarter last year but down from 30 percent in the March quarter. Supply chain constraints due to the COVID-19 impact and negative consumer sentiment towards China did affect its growth. However, Counterpoint Research claims that some of its recent strategies worked, and models including the Redmi 8A Dual, Redmi Note 8 Pro, and Redmi Note 8 continue to attract consumers.

After Xiaomi, Samsung managed to continue its second position in the market. The market share of the company reached 26 percent from 25 percent reported in the same quarter last year and 16 percent during the first quarter this year. The diversified supply chain helped Samsung receive fastest recovery among the key smartphone vendors in the country. The research firm also noted that it emerged as the first brand to reach almost full manufacturing capacity by the end of June.

Vivo ranked third in the smartphone market with a share of 17 percent in quarter ending June. It is said to have reached 60 percent pre-COVID levels. Realme, which is competing strongly against Xiaomi with its low-margin smartphones, maintained its fourth spot with a share of 11 percent. This shows an increment of three percent from the nine percent share in the second quarter of last year, but it's down from 14 percent reported in the March quarter.

Oppo, which was once the parent of Realme, struggled during the quarter due to supply constraints, though it managed to maintain its fifth position with a share of nine percent.

Smartphone shipments in India in Q2 2020
Photo Credit: Counterpoint Research

Apart from the top five players, Counterpoint Research reported that OnePlus regained its top position in the premium market of smartphones over Rs. 30,000 price segment. It is likely to grow further with the newly launched OnePlus Nord. Further, Apple remains the leader in the ultra-premium segment, which comprises phones over Rs. 45,000 price.

Chinese contribution declined
Counterpoint Research analyst Shilpi Jain said in the report that the contribution of Chinese brands in the Indian market declined to 72 percent in the second quarter from 81 percent in the first quarter of this year.

“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,” she said.

The decline in share of Chinese brands is mainly due to the India-China border dispute.

“However, local manufacturing, R&D operations, attractive value-for-money offerings, and strong channel entrenchment by Chinese brands leaves very few options for consumers to choose from. Additionally, in the era of globalisation, it is difficult to label a product based on country of origin as components are being sourced from many different countries,” Jain added.

Feature phones market worst affected due to COVID-19
The report by Counterpoint Research mentioned that the feature phone market in India declined by a massive, 68 percent YoY in the second quarter as consumers in the cost-sensitive segment reduced discretionary purchases owing to the COVID-19 impact. Itel managed to continue its leadership in the feature phone market with 24 percent share, while Lava and Samsung came at second and third spots with 23 and 22 percent share, respectively.

Counterpoint Research said the decline in feature phone shipments in the country is expected to boost the used and refurbished mobile phone market in the near-to-mid term.

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