India has been among the fastest growing smartphone market in the world as more users shift from feature phones. However, the nationwide lockdown in the wake of the COVID-19 pandemic and the expected economic fallout are likely to hit growth this year.
In the January-March quarter, total smartphone shipments in the country rose just 4 per cent year-on-year, according to research firm CMR. While, there was good consumer demand before the onset of COVID-19, CMR said it remained cautious on the pace of recovery.
“We are keeping a close tab on the macroeconomic factors and how it plays out from here on. Our best-case scenario suggests a potential decline of 11-12 per cent in overall smartphone shipments for 2020,” said Prabhu Ram, head-industry intelligence group at CMR.
Samsung has been the biggest loser in India’s smartphone market, with total units sold plunging 41 per cent last quarter. Its smartphone market share dropped to 16 per cent in the first quarter, compared with 28 per cent in the same period a year ago. The maker of Galaxy series of smartphones has now slipped to the third spot.
The Korean smartphone giant has been facing tough competition from Chinese companies and has seceded space in the affordable smartphones segment priced under Rs 10,000 to the likes of Xiaomi and Realme, according to CMR.
While, Xiaomi retained the lead in the market with a 30 per cent market share, Vivo, Realme and Oppo, all owned by China’s BBK Electronics, have made big gains in the market.
Vivo grew 45 per cent year-on-year, helping it become the second largest brand in the smartphone market in India with a 17 per cent market share. Realme’s sales more than doubled, helping its market share surge to 14 per cent from 6 per cent.
“Realme has been able to offer more value proposition for consumers with interesting product mix, aggressive marketing and offline forays,” said CMR.
Oppo, which had introduced Realme as a sub-brand a few years ago, has also grown its market share to 11 per cent from 7 per cent.
Indian government extended a nationwide lockdown imposed to curb the spread of COVID-19 till May 17. Through end of March and April, supply and sales of only essential goods was allowed, forcing many other industries including smartphone companies to suspend operations. Now, as some of the restrictions have been eased in green and orange zones, smartphone companies are gearing up to kickstart operations.
On Thursday, Samsung said it would reopen its exclusive brand stores starting this week. As of now, these stores will open in the green and orange zones. The company has also partnered technology company Benow to launch a new digital platform, which will enable customers buy Samsung smartphones online from local retailers.
Earlier this week, Xiaomi had rolled out Mi Commerce, a similar online-to-offline retail platform. Realme, too, has resumed ecommerce operations in green and orange zones.
Phone companies were hit by a double whammy—first there were supply issues as Chinese factories closed in February. But, as Chinese market started reopening in April, the lockdown in India hit demand.
Even as companies are resuming their operations now, due to the economic impact of COVID-19, demand may not pickup immediately, feel analysts.
“Faced with personal and economic uncertainties, consumer spending will remain muted for the better part of the year. Unless absolutely necessary, such as replacing a mobile phone, consumers may choose to conserve,” said Anand Priya Singh, analyst-industry intelligence group, CMR.
Singh expects the market to recover lost ground in the run-up to the festive season.