Xiaomi tops India smartphone market in April-June quarter despite anti-China sentiment

Samsung emerged as the second largest brand in Q2 followed by Vivo, as per the study by Counterpoint Research.
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India’s smartphone shipments declined by 51% year-on-year to just over 18 million units in Q2 2020, according to the latest research from Counterpoint’s Market Monitor service. And despite the anti-China sentiment over the past few months, Xiaomi continue to lead the smartphone market with a market share of 29%in Q2 of 2020, closely followed by Samsung and Vivo. As per Counterpoint, OnePlus regained its top position in the premium market with the launch of the OnePlus 8 series.

Speaking of the smartphone market overall, nationwide lockdown imposed by the Indian government to combat COVID-19 resulted in zero shipments during April. However, the report notes that the market is starting to return to normal. In June 2020, Indian smartphone shipments registered a mild decline of 0.3% YoY, thanks to the pent-up demand as well as a push from brands.

How various brands fared

Despite supply constraints and rising negative consumer sentiment towards China, Xiaomi continued to lead the Indian smartphone market with the Redmi 8A dual, Redmi Note 8 Pro, and Redmi Note 8 attracting consumers’ interest due to “competitive pricing, strong value propositions, and good channel reach.”

Samsung recovered fastest as it reached 94% of pre-COVID levels becoming the second largest brand in Q2 2020, according to Counterpoint. The brand closely followed Xiaomi, increasing its share to 26% in Q2 2020 from 16% during the last quarter. Revamping the M-series and launching it in offline channels together with new schemes like Samsung Care+ helped the brand to further restore its position in the Indian market.

Vivo was also able to manage post lockdown demand well as it exited the quarter with 60% 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 maintained the fourth spot though its share declined to 11% as it faced manufacturing constraints due to the shutdown of the factory for almost all of May. However, its newly launched Narzo series performed well in the budget segment and it will look forward to further capitalise on momentum in this segment, the report says.

OnePlus regained its top position in the premium market (>Rs 30000 ~$398) with its newly launched OnePlus 8 series, which also comes with 5G.

Apple remains the leading brand in the ultra-premium segment (>Rs 45000 ~ $600) driven by iPhone 11 shipments, though it lost some share to OnePlus in Q2.

Itel remains the market leader in the feature phone market reaching its highest ever share of 24% in the quarter.

Supply constraints

Commenting on the market dynamics, Prachir Singh, Senior Research Analyst at Counterpoint Research said, “The COVID-19 pandemic wiped out almost 40 days of production as well as the sales of smartphones due to the nationwide lockdown. During May, the government allowed shops to open and online channel deliveries for non-essential items. As a result, the market witnessed a surge in sales as the lockdown restrictions were slowly lifted.”

Prachir says that the quarter was thus marred by both demand and supply constraints which led Original Equipment Manufacturers to rethink their go-to-market strategies.

On the supply side, Prachir said that factories were shut down in April and started operating in May, which resulted in supply shortages for some manufacturers. Additionally, the last week of the quarter saw components being held up at customs, which also impacted the supply chain.

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% 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, the report says. 

Commenting on how the pandemic has been shaping the competitive landscape, Shilpi Jain, Research Analyst at Counterpoint Research, noted, “The contribution of Chinese brands fell to 72% in Q2 2020 from 81% in Q1 2020. 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.”

Online channel share reached the highest ever level, accounting for almost 45% of sales, a second-quarter record as consumers preferred contactless purchases and physical distancing.

The report suggests 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 Rs 41000 PLI (Production linked incentive) scheme in April, OEMs are planning to set up production bases in India. For example, Lava, a homegrown brand is also planning to shift its handset production from China to India to leverage the PLI scheme. Apple is also planning to shift 20% smartphone production from China to India.

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