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End 2016, sees domestic smartphone brands knocked out of Top 5 as Korean/Chinese brands dominate, says an IDC study
Predominantly Chinese brands —and a global leader from Korea—are acquiring a grip on the Indian smart phone market. A study by International Data Corporation (IDC) reveals that they scooped up 46 percent of the business, knocking off all Indian companies for the first time, from the Top Five, in the last quarter of 2016.
This trend is consistent with the global scenario, where also, top Korean and Chinese players are slowly growing their market share, according to another study by Gartner —albeit not to the extent visible in India
The IDC Quarterly Mobile Phone Tracker, India, just released, registered 109.1 million units of smartphone shipments with a marginal 5.2 percent annual growth during 2016. In the last quarter of 2016, smartphone shipments clocked 25.8 million units, declining sharply by 20.3 percent over the previous quarter. This is mainly due to two reasons: a seasonal decline after an all-time high festival quarter and demonetization in the month of November, which led to lower consumer sales in November and December.
Says Karthik J, Senior Market Analyst, Client Devices, IDC: “Feature phone to smartphone migration has slowed down as prices of smartphones are still quite high for a feature phone user. Also, ease of use, long battery life and durability of feature phones continue to be relevant for large numbers of users of this category.”
In the smartphone market, the share of China-based vendors touched a whopping 46 percent in the September to December 2016 period, as their shipments doubled over the same period last year, while the share of homegrown vendors further slipped to 19 percent.
“This is first time when none of the homegrown vendors were able to make their position in top five,” says Jaipal Singh, Market Analyst, Client Devices, IDC India. “The decision of sticking with a 3G-heavy portfolio and prioritising the price game over product experience is working against the dominance of homegrown vendors."
Things may get worse, before they get better for Indian players, as China-based vendors have now entered the high volume feature phone market, which has traditionally been dominated by the homegrown vendors.
China's Transsion Group which entered the Indian market in mid 2016 with their “itel” brand climbed to the 2nd spot in the overall mobile phone market with aggressive shipments of feature phones in the last quarter of 2016. Transsion is also expected to launch few more brands in the later half the year within the same price bands where homegrown vendors are competing.
India is a price-sensitive market and feature phones remain the dominant category in the total mobile phone market, with annual shipments of 136.1 million units. The category declined by only 9.4 percent in 2016 as compared to 16.2 percent in 2015.
One in three phones are bought online in India: Online sales in the smartphone market remained at 31.2 percent towards year end with Xiaomi and Lenovo accounting for more than half of the phones bought.
India smartphone Big Five in Q4 2016
1. Samsung 25.1%
2. Xiaomi 15.3%
3. Lenovo 9.9%
4. Oppo 8.6%
5. Vivo 7.6%
Indian Big Two
When seen across 2016 however, the Top 5 for the year gone by, includes two aggressive Indian players —Micromax and Reliance Jio.
Here are the market shares according to IDC:
India smartphone Big Five in 2016
1. Samsung 24.8%
2. Lenovo 8.9%
3. Micromax 8.8%
4. Reliance Jio 7.1 %
5. Xiaomi 6.6%
