- As a result of the pandemic, overall 2020 smartphone shipments are expected to decline by 10%.
- Xiaomi’s smartphone market share reached the highest level since Q1 2018.
- realme was the fastest growing brand (+119%) during the quarter followed by OPPO (+83%), Apple (+79%), Transsion (+78%) and Vivo (+40%)
- India saw its first 5G smartphone launches during the quarter from realme and iQOO.
New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires
Apr 27th, 2020
India’s smartphone shipments grew a modest 4% YoY to reach a little over 31 Million units in Q1 2020, according to the latest research from Counterpoint’s Market Monitor service. January and February shipments grew annually due to new launches and aggressive promotions. However, a steep annual decline in March (-19%) due to COVID-19 outbreak restricted overall quarter growth to just 4%. The nationwide lockdown was enforced by the Indian government from the last week of March and will remain in place until May 3rd. Any signs of recovery will likely only start from the third quarter onwards. As a result, we are estimating that overall smartphone shipments will decline by 10% for the full calendar year.
Commenting on the market dynamics, Prachir Singh, Senior Research Analyst at Counterpoint Research said, “The COVID-19 effect on India was relatively mild until mid-March. However, economic activities declined as people save money in expectation of an extended period of uncertainty and an almost complete lockdown. Almost all smartphone manufacturing has been suspended. Further, with the social distancing norms, factories will be running at lower capacities even after the lockdown is lifted. Consumer demand will have a larger impact on smartphone sales, as people will focus on saving and therefore limit discretionary purchases. As entry-level smartphone consumers will be the worst-hit by the lockdown, the demand for the entry-level smartphones will decline in the near-term. We believe demand will shift to the second part of the year. Even if the situation stabilizes by mid-year, people may hold-off purchasing until the festive season.”
Commenting on the competitive landscape, Shilpi Jain, Research Analyst at Counterpoint Research said, “Smartphones should be considered as essential items during the lockdown as people are dependent on them as a primary mode of communication. We believe that sales should be allowed through online channels or at least adopting an Online to Offline (O2O) model. This is happening in Europe and the USA where online channels still remain in service.”
“For OEMs, a lot of work will be needed to restart operations once the lockdown is lifted. This will range from managing existing inventory across all distributor and retail touchpoints and supporting retailers sell-through older inventory. Also, if the lockdown is lifted in phases starting with the green zone areas, OEMs will have to align their channel and sales strategies to drive sales in these non-affected areas.”
Exhibit 1: India Smartphone Market Share Q1 2020
While the smartphone market registered YoY growth, the feature phone market saw a decline of around 24% YoY in Q1 2020 implying consumers are transitioning to smartphones. Chinese brands are gaining momentum in the feature phone market, reaching a combined 33% share of total feature phone shipments, up from 17% in Q1 2019. Itel is the principal brand driving this change.
Exhibit 2: India Feature Phone Market Share Q1 2020
- Xiaomi leads the India smartphone market with a 6% YoY growth in Q1 2020 to reach its highest ever market share since Q1 2018. This was driven by the strong performance of its Redmi Note 8 series. Offline expansion, customer focus, and affordable pricing strategies also helped Xiaomi to expand its consumer base. Xiaomi was also the leading brand in the overall handset market (when feature phones are included) surpassing Samsung.
- Vivo grew 40% YoY in Q1 2020 driven by strong performance Y series models. Vivo exited the quarter with low inventory which helps the brand have a good command over its market planning and new launches. However, its flagship V series launch was delayed as a result of COVID-19.
- Samsung’s shipments were driven by its upgraded A and M series (A51, A20s, A30s, and M30s). Samsung managed to hold 3rd position in Q1 2020 due to launches across several price tiers, especially in the affordable premium segment (S10 Lite, Note 10 Lite). However, it declined sharply YoY due to an 84% decline in shipments in the sub INR 10K (~$130) segment which was captured by realme, Xiaomi and Vivo.
- realme grew 119% YoY in Q1 2020 driven by the newly launched 5i and C3. It was the first brand to launch a 5G-enabled phone in the India market (realme X50 Pro 5G). Offline expansion, strong value propositions and aggressive branding helped realme to achieve this growth.
- OPPO shipments grew 83% in Q1 2020, due to demand for its budget segment devices, A5 2020 and A5s, as well as a good performance for the recently launched A31 and A9 2020 in the offline segment.
- Transsion Group brands (Itel, Infinix, and Tecno) reached its highest ever market share in Q1 2020 registering 78% YoY growth. Transsion remained strong in tier 3, tier 4 cities, and rural India. Itel continues to be the number one smartphone brand in the entry-level sub-INR 4,000 (~$ 55) price segment, while Tecno and Infinix showed good YoY growth in the INR 6000-INR 10000 (~$ 80-$130) segment by bringing attractive features in budget level smartphones. Itel also remained the #1 feature phone brand during the quarter.
- Samsung was the number one premium (>INR 30000,~$400) smartphone brand surpassing OnePlus in its flagship launch quarter.
- OnePlus’ growing presence in the ultra-premium segment (>INR 45000, $600) will help it to expand within the same segment with its new 8 Pro series.
- Apple grew a strong 78% YoY driven by strong shipments of iPhone 11 and multiple discounts on platforms like Flipkart and Amazon. In the ultra-premium segment (>INR 45000,~$600 ) it was the leading brand with a market share of 55%.
- Poco debuted as an Independent brand, got off to a good start by capturing a 2% market share during its first entire month of operations in March 2020. It was also among the top five brands in the INR 15-20K (~$200-$260) price segment.
- A GST hike was announced during the quarter which we expect will have an impact on OEMs margins and new launches. A strong dollar and the GST hike will be detrimental to the mobile industry. Due to the hike, most of the OEMs have already increased smartphone prices.
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The Market Monitor research is based on sell-in (shipments) estimates based on vendor’s IR results, vendor polling, triangulated with sell-through (sales), supply chain checks, and secondary research.