- Smartphone shipments to India registered an 8 per cent growth to about 50 million units and it is an all time record for a single quarter.
If smartphone sales are a means to measure the health of the economy, India should be doing exceptionally well and if brand preferences are any indication of political choice, Chinese brands are the preferred choice.
The number of smartphone shipments to India during the past quarter has been released and it is an all time record for a single quarter, according to a report by research firm Canalys.
Smartphone shipments to India registered an 8 per cent growth to about 50 million units during the third quarter of 2020, led by Xiaomi. Smartphone shipments of Chinese vendors actually increased by about 2 per cent, compared to the same period last year. In total, Chinese vendors shipped 76 per cent of total smartphones this quarter compared to 74 per cent a year ago.
“There are not many players outside of the Chinese space for now,” says Adwait Mardikar, an analyst at Canalys. Xiaomi remained the market leader, growing 9 per cent to ship 13.1 million units. Samsung regained second place from Vivo, with 10.2 million units, up 7 per cent. Vivo stood third, growing 19 per cent to ship 8.8 million smartphones, while Realme and Oppo had 8.7 million and 6.1 million units shipped respectively.
Explaining the reason why smartphone sales have improved amidst an economic slowdown Mardikar says, “the impact of COVID-19 in India has been a dichotomy of sorts….The lockdown forced most of working India to stay at home and refrain from big-ticket spending on travel, food and beverages, increasing the overall dispensable income.”
According to him, as much of India remains physically disconnected, the smartphone has increasingly become a necessity not only for social connection, but also for entertainment, education, banking, payment and more.
“The government, slowly but surely reducing restrictions on movement after a three month lockdown, has created the perfect atmosphere for sustained growth,” he adds.
Online channels: A true winner
While brick and mortar stores suffered, almost all vendors have shown positive shipment growth, says Mardikar.
“The true winners are the online channels, who have been buoyed with a huge influx of devices ahead of the festive season. Ongoing sales at Amazon and Flipkart are a clear indication that despite the economic downturn, India’s penchant for a good smartphone, and a good bargain, remains intact,” he says.
Though smartphone vendors are bullish for now the he warns that the numbers may not remain the same. “Unemployment has risen, impacting the lowest rungs of society most, and affecting the long-term outlook of India’s smartphone market.”
According to him the re-entry of Micromax in the sub Rs10,000 category could also make a difference with regard to the numbers of Chinese vendors.
“They are expected to come back strong and are making the right noises. But it would take at least two to three years,” he adds.
Micromax, which was the number 2 player in the Indian market a few years ago was thrown off the big league by Chinese players. Last week the company announced that it plans to re-enter the competition and announced a new brand called “in”.
The company’s co-founder Rahul Sharma in a tweet evoked the Indian Prime Minister’s call to Make in India and the Aatmanirbhar Bharat movement said it is ready for a comeback.
Meanwhile, as per analysts, Samsung’s aggressive product portfolio and pricing strategy coupled with muted marketing campaigns by Chinese brands could have resulted in improved performance by the South Korean brand.
“Ongoing tension between India and China has been a hot topic in the past few months, but we have yet to see a significant impact on purchase decisions of mass market customers,” said Varun Kannan, analyst at Canalys.
Ongoing border conflict
“However, the tensions have caused Chinese smartphone brands to act more conservatively in recent months, reducing their marketing spend, and carefully trying to project the image that they are important contributors to, and stakeholders in, the economic future of India.”
Vivo, which in 2018 won the 5-year contract for the title sponsorship of Indian Premier League (IPL) for Rs 2,199 crore in August withdrew from this year’s sponsorship deal, following a backlash in India due to the ongoing border conflict.
Meanwhile Apple which opened its online store in India sold about 800,000 units in India in the third quarter regaining momentum. “Apple is finally paying attention to India,” said Canalys Research Director, Rushabh Doshi.