Xiaomi Continues to Lead Indian Smartphone Market in Q1 2018: Research Firms

While its phones may not always be available to buyers due to flash sales with insufficient stocks, Xiaomi has continued its leadership in India in the first quarter of 2018 - surpassing Samsung and its homegrown competitors, as per the latest data released by two research firms. The Beijing-based company reportedly owns a market share of over 31 percent, which is 6 percent more than its tally in the final quarter of 2017.

According to the latest report by Counterpoint, Xiaomi maintained its lead in the first quarter of 2018 with a record 31.1 percent market share - significantly increased from the 13.1 percent share reported in the same quarter last year, and 25 percent in Q4 2017. Counterpoint Analyst Anshika Jain believes that Xiaomi's growing performance is driven by raising product-pull in the offline market, building upon its existing strong presence in the online space where it captured a record 57 percent share. "Xiaomi's Redmi Note 5 and 5 Pro were the most popular models for the Chinese brand, whereas Samsung Galaxy J7 Nxt and J2 (2017) drove volumes for the Korean vendor," Jain said.

Xiaomi's growth is ahead of Samsung's 26.2 percent market share that Counterpoint reported for the first quarter of 2018. After Samsung, Vivo stands at 5.8 percent share, Oppo at 5.6 percent share, and Huawei-owned Honor at 3.4 percent. This shows that the performance of Chinese companies accounted for 57 percent of the total smartphone market in India in the first quarter of 2018, up from 53 percent during the same quarter last year. Counterpoint notably marks it as the highest ever contribution by Chinese players in the Indian smartphone market.

Furthermore, Counterpoint claims that Honor became the fastest growing smartphone brand with 146 percent of the growth in the first quarter of 2018. Xiaomi and OnePlus became the second and third fastest-growing smartphone brands with the growth of 134 percent and 112 percent in the first quarter. Transsion Group of China - which owns brands such as Tecno, Itel and Infinix - was the the fifth biggest player in the Indian smartphone market, and accounted for four percent market share in the quarter. Tecno especially had a good quarter, and grew 23 percent year-on-year; it is poised to enter the top 10 rankings, the market research firm says.

Canalys, in a separate report, claims that Xiaomi has registered an annual shipment growth of 155 percent with shipments passing the milestone of over nine million units in the first quarter. In contrast, Samsung is reported to have shipped 7.5 million smartphones units in the same quarter, while Oppo took the third place with 2.8 million shipments and Vivo reached the fourth spot with 2.1 million shipments.

"Xiaomi is becoming a force to be reckoned with in India," said Canalys Research Analyst Ishan Dutt. "Apart from being some of the best value devices on the market, Xiaomi's smartphones are now available in more places and in larger quantities. All in all, Xiaomi's product and channel strategies are working."

Canalys estimates that the top four vendors accounted for about 75 percent of all smartphone shipments to India, while Xiaomi and Samsung accounting for 56 percent.

On the overall mobile phone shipments part, Counterpoint reports that the shipments grew 48 percent year-over-year in the first quarter of 2018. The research firm states that the market was driven by the feature phone segment that doubled in the first quarter due to strong shipments for Jio Phone, while the smartphone market remained flat with no year-over-year growth.

"The demand for Jio Phone continued through Q1 2018 as Reliance Jio's feature phone market share raced from 0 percent last year to 36 percent in Q1 2018. This demand was catalysed by the introduction of a cheaper data plan, for the Jio Phone in January: INR 49 (approximately US$ 1) per month including unlimited voice calling and 1GB of data per month," said Tarun Pathak, Associate Director, Counterpoint.

Counterpoint said that 96 percent of the total smartphones shipped in the country were assembled or manufactured locally to reduce the impact of import duties and with increased duties on CBU (Completely Built Unit) and PCBA (Printed Circuit Board Assembly), the market will shift from SKD (Semi Knocked Down) to CKD (Completely Knocked Down) level manufacturing.

Interestingly, while Canalys said the Indian smartphone market grew 8 percent in the quarter, Counterpoint claimed the market experienced flat growth in the period.