Festive Season To Bring Cheers to Handset Market

Although Xiaomi continued its domination in India in the second quarter, Samsung overtook it in the overall mobile phone market, says a report

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.

Smartphone market in India faced a sharp year-over-year (YOY) decline of 50.6% in the second quarter to 18.2 million units, as the country remained under lockdown through the first half of the quarter, according to IDC’S Quarterly Mobile Phone Tracker. Vendors faced major supply chain disruptions at the beginning of the quarter, and the shortage continued into the rest of the quarter as factories operated at partial capacity even after the lockdown was lifted. Components and parts remained at the ports waiting to be cleared, especially for Chinabased vendors. By June, sales increased mainly due to the pent-up demand from the lockdown period. However, purchases were mainly driven by availability rather than by choice.

The online channel registered a high market share of 44.8% but declined 39.9% YOY in unit terms due to lockdown restrictions on the delivery of electronics as well as severely limited stock for most of the quarter. “Many offline channel partners adopted new ways of marketing by reaching out to consumers through social media platforms, Whatsapp, references, etc., for doorstep demos and deliveries, as well as accepting contactless payments. However, these initiatives were limited to big and medium-size retail outlets in metros and Tier 1/2 cities, and was not able to arrest the steep annual decline of -56.8% for the offline channel,” said Upasana Joshi , Associate Research Manager, Client Devices, IDC India.

The average selling price of smartphones remained flat at US$161 in 2Q20. Brands were forced to increase prices due to the GST hike in April and the depreciating rupee. The sub-us$200 segment reached a high of 84% share due to dampening consumer sentiment. The sub-us$100 segment increased to 29% share in 2Q20 from 20% a year ago. The Redmi 8A Dual alone contributed 33% of the shipments in this segment. The US$200-300 segment fell (-71.6%) YOY. The mid-premium segment of US$300<500 with a share of 4.8% declined YOY by (48.4%) with top models such as Samsung’s Galaxy A51 and A71, Vivo’s V19, Apple’s iphone SE (2020), and the Oneplus 7T. Shipments in the premium (US$500+) segment declined by (-35.4%) YOY in 2Q20; Apple continued to dominate there with a market share of 48.8%, followed