China dominates Indian smartphone space – Part 2

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China-based companies bagged 4 spots in the top 5 of major players in the Indian smartphone market. Local vendors scramble to release new launches to cover lost ground but will still have to face stiff competition.

« Previously: China dominates Indian smartphone space – Part 1 

The overall mobile phone market shipments in India in Q1 2017 was 56.6 million units with a marginal sequential dip of 3.2 per cent. Feature phones registered 29.7 million units in Q1 2017 with a 9.4 per cent decline over the previous quarter. While the feature phone market remained flat over the same period last year, healthy growth from smartphones resulted in the overall mobile phone market to post 6.5 percent growth in Q1 2017.

The IDC report details the ranking of China-based vendors and how they have done in the Indian smartphone market.

Samsung saw 16.9 per cent sequential growth in Q1 2017, enabling it to maintain its lead in the Indian smartphone market. Shipments grew year-on-year by 21.7 per cent. Multiple new launches in Q1 2017 across price bands with J2 series additions, C9, A-series (2017 versions), etc. incrementally contributed over a million units to the already successful Samsung product line up.

Xiaomi secured second place with a healthy 39.8 per cent sequential growth in Q1 2017 over the previous quarter. Two new launches, the Redmi Note 4 and Redmi 4A, in the first quarter of the year not only drove the volume growth for Xiaomi but also helped it to lead online smartphone shipments with a 40.6 per cent share.

Vivo climbed up to third place in Q1 2017 compared to its performance in the same period last year; the company was not included in the Top 10. Its shipments grew 44.2 per cent over Q4 2016 to secure a 10.5 per cent vendor share. All the new launches from this brand were targeted towards strengthening the above ₹9,702.46 ($150) segment, which is expected to be a high growth segment this year.

Lenovo (including Motorola) slipped to fourth place as its shipments remained flat over the previous quarter. However, shipments grew at a healthy 33.7 per cent over Q1 2016. Contribution from retail and the expansion of its presence in the offline channel has been challenging for the vendor in the last few quarters.

OPPO is close to Lenovo group in vendor share and ranks fifth. Shipments grew by 14 per cent in Q1 2017 over the previous quarter and more than doubled over the same period last year. While OPPO’s online shipments saw marginal traction through its exclusive launches, it continues to be focused on the offline channel with aggressive marketing and channel support.

IDC 1Q2017 Mobile Phone Tracker (cr)
Figure 1: *New product launches and expansions in online shipments propelled China-based vendors to lead the Indian smartphone market. *

What lies ahead for India

Channel players in the smartphone distribution setup are taking a cautious approach in procuring the inventory for the second quarter due to the expected implementation of GST on 1 July 2017.

"Apprehensions on lower tax credit and lack of complete clarity regarding the processes are the major concerns of retailers and city/state level distributors, which may lead to a limited inventory stocking, especially in the second half of June 2017," said Navkendar Singh, Sr. Research Manager, IDC India. "But this impact is expected to be short-lived as the market is likely to attain normalcy in few months," he noted.

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