Chinese smartphone brands' market share in India slips: Counterpoint

Chinese smartphone brands saw their market share in India fall to 72 per cent in June quarter from 81 per cent in the preceding three months due to Covid-19 supply chain disruption and growing anti-China sentiment, Counterpoint Research said on Friday.

Chinese brands such as Oppo, Vivo and Realme had a commanding market share in the world's fastest-growing smartphone market but their share declined during April-June, Counterpoint said in a report.

India's smartphone shipments declined by 51 per cent year-on-year to just over 18 million units in the June quarter, impacted by the nationwide lockdown imposed by the Indian government to combat Covid-19 in April and May, Counterpoint said.

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Shilpi Jain, the Research Analyst at Counterpoint Research, said the contribution of Chinese brands fell to 72 per cent in June quarter from 81 per cent in March 2020 quarter.

"This was mainly due to the mixture of stuttering supply for some major Chinese brands such as Oppo, Vivo and Realme, and growing anti-China 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," she said.

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, she said.

"... in the era of globalisation, 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," Jain said.

She noted that Jio-Google's partnership - which was announced earlier this month - to bring a highly affordable 4G Android smartphone could also gain ground, banking on the growing #VocalforLocal sentiment.

Xiaomi led the tally with 29 per cent share of the smartphone market, followed by Samsung (26 per cent), Vivo (17 per cent), Realme (11 per cent), Oppo (9 per cent) and others (8 per cent) in the June quarter.

In the March quarter, Xiaomi had 30 per cent share of the smartphone market, while Vivo had 17 per cent share, Realme (14 per cent) and Oppo (12 per cent).

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Samsung - which had fallen to the third spot with 16 per cent market share in the March quarter, regained the second position in the June quarter cornering 26 per cent share.

Smartphone vendors had shipped a little over 31 million units in the March 2020 quarter, and 37.7 million units in the June 2019 quarter, as per previous Counterpoint reports.

The Counterpoint report said the coronavirus-induced lockdown had resulted in zero shipments during April. However, the market is starting to return to normal and in June 2020.

Indian smartphone shipments registered a mild decline of 0.3 per cent y-o-y in June on the back of pent-up demand as well as a push from brands, it said.

Due to concerns over potential Covid-19 infection, consumers prefer contactless purchasing and online channels, it said adding that smartphone brands are also recognising this trend by pushing more inventory to online channels.

"The Covid-19 pandemic wiped-out almost 40 days of production as well as the sales of smartphones due to the nation-wide lockdown... the market witnessed a surge in sales as the lockdown restrictions were slowly lifted," Counterpoint Research Senior Research Analyst Prachir Singh said.

The quarter was, thus, marred by both demand and supply constraints which led original equipment manufacturers (OEMs) to rethink their go-to-market strategies, he added.

"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," Singh said.

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Additionally, the last week of the quarter saw components being held up at customs, which also impacted the supply chain, he added.

OnePlus regained its top position in the premium market (over Rs 30,000 segment), while Apple remained the leading brand in the ultra-premium segment (over Rs 45,000).

In the feature phone segment, Itel occupied the top slot with 24 per cent share, followed by Lava (23 per cent), Samsung (22 per cent), Nokia (9 per cent) and Karbonn (5 per cent).

Counterpoint said the feature phone market was the worst affected segment as it declined by a massive 68 per cent y-o-y in the June 2020 quarter 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, it said adding that India is home to more than 350 million feature phone users.