China dominates Indian smartphone space – Part 1

Article By : IDC

Chinese vendors dominated more than half of the smartphone market share in India, while homegrown vendors' share dipped to a mere 13.5% in Q1 2017.

In the first quarter of 2017, 27 million smartphones were shipped to India, a growth of 14.8 per cent over the same period last year, based on International Data Corp.'s Quarterly Mobile Phone tracker. Unlike the previous year, shipments grew sequentially in CY Q1 2017 by 4.7 per cent, recovering from the demonetisation impact in Q4 2016.

China-based vendors continue to strengthen their grip in Indian smartphone market, according to IDC. China-based vendors nabbed 51.4 per cent share of the smartphone shipments in India with 16.9 per cent sequential growth and impressive 142.6 per cent growth over the same period last year. In contrast, the share of homegrown vendors dropped to 13.5 percent in Q1 2017 from 40.5 per cent in Q1 2016, IDC noted.

The increasing dominance of China-based vendors has resulted in a few new trends in India:

  • ASP (average selling price) of smartphones has increased from ₹8,473.48 ($131) in Q1 2016 to ₹9,767.14 ($155) in Q1 2017. Almost two-thirds of smartphones sold by China-based vendors are in the price range of ₹6,468.31–₹12,936.61 ($100-$200) in India, shifting the mass segment which used be the less than ₹6,468.31 ($100). This contributes to almost half of smartphone shipments in Q1 2017.
  • Of the smartphones shipped in Q1 2017, 94.5 per cent were 4G-enabled. While home-grown companies had half of their portfolio in 3G in Q1 2016, China-based vendors were already bringing majority of the devices in the 4G segment, which benefitted them in leveraging the 4G wave demand in India.
  • Almost 5 out of 10 smartphones shipped in Q1 2017 had 13 megapixel or more as primary/rear camera. Of the devices shipped by China-based vendors, 62.2 per cent are equipped with 13 megapixel or more as primary camera.
  • The share of less than 5-inch screen sized smartphones reduced to 21.2 per cent in Q1 2017 from 40.3 per cent in Q1 2016. The focus of China-based vendors remains on bigger screens; 9 out of 10 smartphones shipped by China-based vendors had screens that were 5-inch and above.
  • For the first time, a smartphone model from a China-based vendor became the highest shipped smartphone as Redmi Note 4 replaced Samsung Galaxy J2, which was the top model in Q4 2016.
  • Direct internet channels (vendors selling from their website) captured 4 per cent of the market share in Q1 2017 from a negligible share in Q1 2016. Xiaomi’s efforts of operating and frequent short supply of its devices with eTailers were among the key reasons why Indian consumers shifted to buying from vendor websites.

"Though homegrown vendors are making attempts to recapture the lost ground with new launches in sub-$100 as well as in the mid-range segment. But intense competition from China-based vendors continues to be a major challenge and is expected to increase in coming quarters," said Jaipal Singh Market Analyst, Client Devices, IDC India. "Recovery of homegrown vendor is necessary for Indian smartphone market not only to fill-in the vacuum created for last few quarters but also to fuel the feature phone to smartphone migration,” Singh added.

Online channel shipments grew by 7.7 per cent in Q1 2017 over the same period last year. "Over the time, online channel has established itself as a prominent distribution medium in Indian smartphone market with a stable contribution of almost one-third of total shipments for last few quarters. Interestingly, online channel has relatively higher shipments of smartphones with superior features in comparison to the offline channel," said Karthik J, Senior Market Analyst, Client Devices, IDC.

Next: Vendor highlights »

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