Online Channels Now Dominate India Smartphone Market: Survey

The extended presence of COVID-19, especially the high number of casualties during its second wave in 2021, has given a sharp turn to digitization in India. According to Counterpoint Research’s Market Lens consumer survey, this year more than half of the country’s smartphone consumers bought their devices online, compared to more than one-third last year. Counterpoint’s smartphone shipment data for this year so far has also thrown up similar numbers. Further, according to Market Lens, the affordable premium and premium segments became more active in 2021 with 15% of the respondents being from the INR 30,000 and above price band, compared to 7% in 2020.

COVID-19, while making the smartphone an essential part of life, also pushed many offline consumers to online platforms due to restrictions on movement. Besides, the reverse migration of knowledge workers from big cities to smaller cities and towns also played a key role in popularizing online channels. Along with new buyers, there is a strong stickiness among the buyers who are already using online channels.

Transitioning to a digital platform requires people to come out of a certain comfort zone. But this hesitation took a back seat with online shopping emerging as a safer (sometimes only) alternative to the COVID-19-hit offline market. Looking beyond the pandemic, there are more reasons to prefer online over offline. According to the survey respondents, special offers, variety of choices and pricing are the top reasons for them to prefer online channels for smartphone purchase. We call this shift to online digitization because, along with the preference for online channels, people are also relying on YouTubers and influencers to get information for making a smartphone purchase. The survey results show an evident shift from relying heavily on word of mouth and friends/family for smartphone recommendations in 2020 to relying on YouTube videos and opinions of technology influencers in 2021. The change was catalyzed by the COVOD-19-triggered social distancing and work-from-home scenarios.

Market Lens Consumer Study, 2020 & 2021

Source: Counterpoint Research

The effect of COVID-19 on consumers’ smartphone purchase budget faded out soon:

  • In 2020, many respondents from the INR 20,000 and above price segment had planned to lower the budget for their next smartphone.
  • In 2021, the premium and affordable premium segments became more prominent.
  • Based on the survey results, the share of smartphone users from the sub-INR 30,000 price band declined from 2020 to 2021.

Due to the work-from-home situation, respondents are saving more than usual. In addition, the smartphone has become an essential part of life with the rise in virtual connectivity. As a result, there is a movement in the market, with a significant portion of smartphone users looking to purchase their next smartphone from a higher price band. In the Indian festive season of 2021, there is high consumer demand in the mid and premium segments. In fact, the aspiration for premium smartphone brands has grown from 2020 to 2021.

Even as more respondents are planning for premium and affordable premium segments, there are limited players in the competition. This makes the OEMs with a smaller current market share to be highlighted more.


The Market Lens survey was conducted among smartphone users in India for years 2020 and 2021 with an even spread of respondents across the North, East, West, and South regions. Samples of 1,023 units for 2020 and 976 for 2021 were collected from across the Indian smartphone users. We expect the results to have a statistical precision of +/- 5% at the confidence interval of 95%.

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PayPal Second Quarter Numbers Get COVID Push

The second quarter of 2020, which was all about COVID-19, turned out to be a phase of accelerated growth for PayPal with the pandemic providing people an additional reason to adopt contactless payment. Introduction of new services, and good results from the partnerships and acquisitions done in the past, contributed to the stellar performance. The company’s revenue rose 14% QoQ in the second quarter compared to a fall of 7% in the previous quarter.

Exhibit 1: Quarterly Change in Revenue of PayPal since Q2 2018

Counterpoint - Quarterly Change in Revenue of PayPal since Q2 2018
Source: Counterpoint Research

Report Card: Q2 2020 Earnings

Counterpoint-Paypal Q2 2020 Earnings

The COVID-19 Factor

Before the COVID-19 pandemic, money in its intangible form was being increasingly adopted by people, with the graph following a steady path. However, COVID-19 gave a big additional push to digital payment platforms following concerns over spread of the pandemic through currency notes. Those who were reluctant to join such platforms before the pandemic took no time in adopting the contactless mode to pay for their essential purchases.

One of the most accepted modes of contactless payment is the QR code. Though it is not the latest form of contactless payment, it caught wider attention when PayPal recently launched the QR code service in 28 markets globally both on the Venmo and PayPal platforms. QR code enables the users to make a payment just by scanning a code. This service has helped many small merchants survive the pandemic. In fact, PayPal marketed the QR facility as a safer mode of payment during the pandemic.

The pandemic has seen a remarkable shift in people towards e-commerce, helping PayPal garner new users at a remarkable rate. However, the company also points to the higher rate of activity by mature users and their loyalty to PayPal.

PayPal registered a fall in revenue from the travel and vertical event segment. However, this segment has a smaller role in the overall numbers since March, when the pandemic accelerated at an explosive rate globally.

Strength of relationships created by PayPal

PayPal, which has its reach in around 200 markets, has been active in entering collaboration, partnership and acquisition deals since its beginning. Some of the major acquisitions include Venmo, Honey, Braintree and iZettle. Honey, Braintree and Venmo continue to outshine their outcome every quarter. In line with the trend, in the last segment of the second quarter, PayPal entered a tie-up with Gojek. The strength of Gojek in Southeast Asia is being seen as an opportunity to have a deeper penetration in that region. In another move, PayPal has extended the Visa Direct partnership across the world with an extra push to global white label Visa direct payment functionality through PayPal, Braintree, Hyper wallet and iZettle.

Exhibit 2: Partnerships & Acquisitions of PayPal

Counterpoint-Partnerships & Acquisitions of PayPal
Source: Counterpoint Research

PayPal role in addressing socio-economic concerns

PayPal is not only focusing on expanding its reach to people but also looking at leaving an impression in their minds that it cares for their socio-economic well-being. To bridge the economic divide, PayPal has contributed more than half a billion dollars towards the black- and minority-owned businesses and communities in the US, also among the hardest hit by COVID-19. Besides, for the US Small Business Administration’s Paycheck Protection Program (PPP), PayPal has contributed $2 billion in loans to more than 76,000 small businesses. PayPal has also acted as a medium for the customers, employees, and partners for the COVID-19 associated donations. The company campaigned across 12 markets and facilitated over $5.6 billion in donations.

Key takeaways

With the competition in the digital payment industry getting tougher at every turn, PayPal has been making efforts to sustain its growth. A wider reach across nations, along with some complements and substitutes, has helped PayPal in leaving its impression globally at the right time. At the same time, it is essential to educate people about digital payment platforms and their functionality.  With the COVID-19 factor still there, the ripple impact of the second quarter is likely to be highlighted in the coming quarters.

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More than a third of Germans to spend less on next smartphone: Survey

34% of respondents will wait longer than usual for their next smartphone purchase

42% of prospective iPhone buyers have postponed their next purchase 

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – August 05, 2020

According to the latest Consumer Lens survey conducted by Counterpoint Research, people in Germany are planning to trim the budget for their next smartphone purchase. Lockdowns across the nation due to the prolonged presence of COVID-19 forced people to stay at home. While many jobs in Germany were preserved through furlough schemes, the pandemic has affected the economy and consumer confidence. As a result, 34% of survey respondents plan to delay their next smartphone purchase. More than half of these further plan to reduce the amount they intend to spend on a future smartphone purchase. More than a fifth of respondents intend to cut their budget by more than 10%. However, the majority (~70%) are planning to buy a phone costing more than €270. The extent of reduction in budget varies with age, occupation, and future brand preference:

  • Nearly 40% of male respondents plan to cut their budget for the next smartphone; higher than for females.
  • 37% of salaried respondents intend to trim budgets for future smartphone purchases.
  • While around a quarter of respondents under the age of 25 plan to cut their budget by no more than 10%, those aged above 25 are more frugal, expecting to reduce their budget by more than 10%.
  • Prospective iPhone buyers are most affected among the top smartphone brands, with more than 40% looking to postpone their next purchase as well as cut their budget.

Commenting on this trend, Counterpoint Research Associate, Arushi Chawla said: “34% of the respondents are looking to postpone their planned purchase of a smartphone. Further, the impact of coronavirus has been deep enough to create uncertainty about future income. Due to this, the delay in the next purchase varies between different income groups. 43% of the non-working and 35% of salaried respondents will likely postpone their next smartphone purchase with males more likely to postpone than female respondents. We were surprised that prospective iPhone buyers are intending to postpone purchasing and/or cut the budget more than prospective buyers for other top brands. This is not the behavior we have seen in other European markets”

Brand-Wise Cut in Smartphone Budget by More Than 10% Due to COVID-19

Counterpoint Research -Brandwise Cut in Smartphone Budget by More Than 10% Due to COVID-19

Source: Counterpoint Consumer Lens

The study also sheds light on the portion of respondents who want to boycott Chinese-origin smartphones. Respondents under the age of 35 are more prompted to explore smartphones manufactured outside China. Also, many (36%) of the salaried respondents will be strictly looking for a smartphone other than from China.

Commenting on the issue of smartphone manufacturing location, Counterpoint Research Senior Analyst Pavel Naiya said: “Many consumers globally look at China as a starting point of the pandemic. However, most respondents from Germany are not bothered about the manufacturing origin of their smartphones. Many seem to believe that most smartphones and their components are, in any case, coming from China. Other than a few international brands, most of the leading smartphone brands can trace their origin to China. However, the coronavirus pandemic has promoted the diversification of manufacturing and supply chain mechanisms for many leading smartphone brands to reduce the dependency on one country.”

Naiya added, “Around a quarter of respondents are unaware of the origin of their smartphone and look forward to increase awareness on the matter. This brings an opportunity for many global and regional players to increase awareness among these consumers. With respondents postponing and/or cutting their budget, the dynamics might change for the German smartphone industry in the short run. However, to make a long-term impact on consumers’ perception will be an uphill task.”

If you are interested in a detailed analysis of app spending and other smartphone consumer behavior, the full report is available for subscribers on our research portal.


The Consumer Lens survey was conducted among smartphone users in seven countries during May and June 2020. The consumer opinions are drawn from a heterogeneous group in terms of age, monthly income, gender, and occupation. Data points were selected which abided with all the logical checks throughout the analysis section and gave a better representation of the ongoing smartphone trends and future purchase intentions.

Analyst Contacts:

Pavel Naiya

Arushi Chawla

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in-depth research, insights, or press inquiries.

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Growth in the Smartphone Market Likely to Return in 2020

Launch of 5G devices and services, as well as growing demand in emerging markets, like India, Russia, Indonesia, will help the global smartphone market return to growth in 2020. This is after another year of slow sales in 2019 due to a slowdown in the developed markets due to a longer replacement cycle, increasing sales of refurbished devices, the lack of 5G iPhones, and the US’ trade ban on Huawei.

We estimate that smartphone shipments in 2019 will decline by 3% year-on-year (YoY). So far, in 2019, the mobile phone market faced a slowdown as many developed markets have broadly transitioned to 4G networks and smartphones. The launch of 5G services in 2019 will bring some relief to OEMs and reduce the quantum of market decline in 2019. However, the impact of the launch of 5G devices and services will fully reflect in 2020.

The decline in 2019 is also attributable to growing ASPs of the premium tier with higher quality hardware, which will continue to increase holding periods. Initially, operators providing subsidies on high-cost 5G devices, in order to poach in early users, will help push 5G device shipments. The prices of such devices are estimated to decline in 2020 and will further increase the adoption.

Looking closely at the other factors that hindered smartphone sales in 2019, we see that the untimely ban on Huawei has left a big mark on the global smartphone market. However, Huawei has been aggressively increasing its market share in China to counter the decline in overseas markets. The brand has already shipped over 115 million smartphones in H1 2019, and the push in China will help it post annual growth in 2019.

Apart from the Huawei trade ban, factors like elongated upgrade cycles and increasing sales of refurbished devices are also contributing to the slowdown. In emerging countries, many mobile phone users are not buying a new phone and rather opting for a second hand or refurbished phone.  Mature markets have also seen a more organized and efficient refurbished and used devices marketplace.

Close to 140 million refurbished phones were sold in 2018, showing marginal growth. This put a dent in the demand for new handsets, and as a result, shipment for smartphones declined 4% year-on-year (YoY) in 2018. Regions seeing the highest volumes include the US and Europe. The fastest-growing markets for refurbs include Africa, South East Asia, and India. These volumes are now considerably past rounding errors and are affecting growth rates.

While longer replacement cycles and increasing refurbished devices sales will continue to hamper the smartphone market in 2020, the launch of the new 5G iPhone, as well as demand for 5G devices to access services, will help the market post year-on-year growth in 2020.

For full report on mobile handset shipment forecast by region and technology click icon.

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