Smartphone Shipments Slip

Pent-up demand after April, May lockdown pushes the June 2020 volumes to PRE-COVID levels and the smartphone user base in India beyond the half a billion mark, says Counterpoint Research

The smartphone shipments declined by 51% YOY to just over 18 million units in Q2 this year in India, according to the latest research from Counterpoint’s Market Monitor service. The nationwide lockdown imposed by the Government of India to combat COVID-19 resulted in zero shipments during April. However, 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. Due to concerns over potential COVID-19 infection, consumers prefer contactless purchasing and online channels. Smartphone brands are also recognizing this trend by pushing more inventory to online channels.

Commenting on the market dynamics, Prachir Singh, Senior Research Analyst at Counterpoint, 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. The quarter was thus marred by both demand and supply constraints which led OEMS to rethink their go-to-market strategies. On the supply side, the factories were shut down in April and started operating in May, which resulted in supply shortages for some manufacturers. Some brands maintained the supply of their products by importing fully assembled handsets. Additionally, the last week of the quarter saw components being held up at customs, which also impacted the supply chain.”

Commenting on how the pandemic has been shaping the competitive landscape, Shilpi Jain, Research Analyst at Counterpoint, 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 antichina 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.”

“However, local manufacturing, R&D operations, attractive value-for-money offerings and strong channel entrenchment by Chinese brands leaves very few options for consumers to choose from. Additionally, in the era of globalization, it is difficult to label a product based on country of origin as components are being sourced from many different countries. This development has given a window of opportunity for brands like Samsung and local Indian brands such as Micromax and Lava, to recapture market share. Further, Jio-google’s partnership to bring a highly affordable 4G Android smartphones could also gain ground, banking on the growing #Vocalforlocal sentiment,” she said.

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.

Market Summary:

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t all of May. However, its newly-launched Narzo series performed well in the budget segment and it will look forward to further capitalize on momentum in this segment.

"MUIPVHI 0QQP BMTP TUSVHHMFE EVSJOH the quarter due to supply constraints, it managed to gain mind share by entering the ultra-premium segment (>INR 45,000 ~ $600) with the launch of its 5G flagship, Find X2 series and attractive hearables. It also revamped its affordable A-series to broaden consumers appeal.