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·       Indian smartphone market crossed 53 million units in Q3 2020.

·       The smartphone shipments registered 9% YoY growth as brands rushed for channel-fill weeks ahead of their usual cycle to capture festive season demand.

·       Samsung led the Indian smartphone market with 24% shipment share for the first time since Q3 2018. Xiaomi followed closely with 23% share and remained the top online brand.

·       Market ASP (average selling price) increased as the mid-tier segment (INR 10,000-INR 20,000) gained its highest ever shipment share in a quarter.

Bengaluru, NFAPost: India’s smartphone shipments grew 9% YoY to reach over 53 million units in Q3 2020, according to the latest research from Counterpoint’s Market Monitor service.

This is the highest-ever shipment in a quarter for the Indian smartphone market. The push from the brands coupled with the pent-up demand due to the lockdown and strong sales on online platforms led to this growth. Consumers are still preferring online platforms due to COVID-19 fears.

Commenting on the market dynamics, Senior Research Analyst Prachir Singh said the Indian smartphone market is on a recovery path as the lockdown restrictions have been relaxed.

“The market has shown a consistent growth for the last few months. It saw strong demand during the Independence Day period in August as major online platforms hosted massive sales. September has always been a high sell-in month as brands prepare for the upcoming festive season and push stock in the channels,” said Senior Research Analyst Prachir Singh.

Senior Research Analyst Prachir Singh also pointed out that almost all the brands recorded growth compared to the last year. In terms of price bands, the mid-tier (Rs 10,000 – Rs 20,000) segment registered the highest growth and reached its highest ever share in a quarter.

Due to the pandemic, Indian consumers have ended up saving on leisure activities. These savings are now being funnelled into smartphone purchases. Additionally, smartphones have become an integral part of consumers’ lifestyle in this changing environment.”

The Indian mobile handset market grew 8% YoY in Q3 2020 due to stronger consumer demand in the smartphone segment and stronger sales of feature phones. The feature phone market registered a 5% YoY growth in Q3 2020 with Itel being the number one brand followed by Samsung and Lava.

Exhibit 1: India Handset Market Share, Q3 2020

Source: Counterpoint Research Market Monitor, Q3 2020

Exhibit 2: India Smartphone Market Share, Q3 2020

Source: Counterpoint Research Market Monitor, Q3 2020

Note: Xiaomi’s share includes Poco brand

Commenting on the competitive landscape and brand strategies, Counterpoint Research Analyst Shilpi Jain said during the start of the quarter, smartphone sales witnessed some anti-China consumer sentiments impacting sales of brands originating from China.

“However, these sentiments have subsided as consumers are weighing in different parameters during the purchase as well. The brands have been quite aggressive as they started building up inventory much ahead of the festive season. Focus on online channels has been increasing due to the Covid-19 situation,” said Counterpoint Research Analyst Shilpi Jain.

Counterpoint Research Analyst Shilpi Jain said even the offline-centric brands like vivo, OPPO and Itel are increasing their online presence due to the changing consumer behavior.

“Though online channels remain in focus, OEMs are also trying to leverage new opportunities in offline channels in Tier 2 and Tier 3 cities. In this regard, Xiaomi launched ‘Mi store on Wheels’, Samsung launched Galaxy M01 Core and vivo announced more retail discounts. Additionally, the brands are focussing on affordability by announcing cashbacks, promotions and offers on devices,” said Counterpoint Research Analyst Shilpi Jain.

On the manufacturing front, Counterpoint Research Analyst Shilpi Jain said the Indian government is focusing on increasing the local value addition.

“Mobile handset production is likely to increase in the coming time as schemes like Production Linked Incentive (PLI) start to impact the overall electronic manufacturing ecosystem. Indian brands like Micromax and Lava are expected to leverage the government’s ‘Atma-Nirbhar Bharat’ initiative and plan their comeback,” said Counterpoint Research Analyst Shilpi Jain.

Market Summary:

·       Samsung became the leading brand in the India smartphone market after two years with 32% YoY growth. It was also the fastest to recover, surpassing the pre-COVID levels in Q3 2020. This strong performance was the result of multiple strategies, including effective supply chain and touching various price points through new launches. Samsung’s aggressive push in online channels, with highest ever online contribution within its portfolio, also helped it regain its number one spot.

·       Xiaomi slipped to number two position for the first time since Q3 2018 with 4% YoY decline. Manufacturing constraints due to the COVID-19 situation affected its supply chain, leading to a supply-demand gap. With ramped-up manufacturing, strong demand for the Redmi 9 and Note 9 series, aggressive product strategy and growing offline presence, we believe Xiaomi will come back strongly in the coming quarter.

·       vivo grew 4% YoY and retained its third position in Q3, driven by strong demand for its Y-series models in offline channels. In Q3 2020, it entered the premium market with the X50 series and was the first OEM to launch a gimbal camera that got positive feedback from consumers.

·       realme also grew 4% YoY in Q3 2020 as it was able to manage supply issues with increased production. It focused on the budget segment with multiple C-series launches to leverage the pent-up demand. Its Narzo series also gained significant attention and was a successful addition to its portfolio. realme shipments grew 52% YoY in the mid-tier segment, driven by the realme 6 and 7 series. It also retained its leadership position on Flipkart.

·       OPPO shipments grew 30% YoY in Q3 2020,driven by the demand for its budget segment devices, the A12 and A11k, as well as a good performance of the recently launched A52, A53 2020 and F15 in the offline segment.

·       Poco crossed 1 million smartphone units for the first time, driven by its new launches – M2, M2 Pro and X3.

·       Transsion Group brands (Itel, Infinix and Tecno) regainedtheir market share in Q3 2020, registering 73% YoY growth. Transsion brands remained strong in Tier 3 and Tier 4 cities, and rural India, capturing fourth position in the overall handset market. It got a spot in top 5 brands in the budget segment (INR 6,000 – INR 10,000 ~$80-$135), driven by the newly launched Tecno Spark 6 Air and Itel Vision 1. Itel recaptured its number one smartphone brand status in the entry-level sub-INR 4,000 (~$ 55) price segment, driven by the A25. Itel also remained the #1 feature phone brand during the quarter.

·       Apple led the premium segment(>INR 30,000 ~$400) surpassing OnePlus even before its flagship launch, driven by strong demand for its iPhone SE 2020 and the iPhone 11. Its upcoming flagship iPhone 12 will further strengthen its position in the coming quarter.

·       OnePlus remained the top brand in the affordable premium segment (INR 30,000-INR 45,000 ~ $400-$600), driven by OnePlus 8 sales. It re-entered the upper mid-tier (INR 20,000 – INR 30,000 ~ $270-$400) with its Nord series and the OnePlus Nord became the best-selling model within the segment in the initial quarter of launch.

  • A Basic Customs Duty (BCD) of 10% was announced on display modules and touch panels, which will be effective from next quarter. This move by the Indian government will impact the cost of production since displays are majorly imported. But it will boost the overall handset manufacturing ecosystem and local sourcing contribution in the long run.

The comprehensive and in-depth Q3 2020 Market Monitor is available for subscribing clients. Please feel free to contact us at press@counterpointresearch.com for further questions regarding our latest research and insights, or for press enquiries.

The Market Monitor research relies on sell-in (shipments) estimates based on vendor’s IR results, vendor polling, triangulated with sell-through (sales), supply chain checks, and secondary research.

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