Samsung Trumps Xiaomi To Reclaim Top Spot In Indian Smartphone Marketspace: Study Samsung led the Indian smartphone market space with a 24 per cent shipment share for the first time since Q3 2018 as Xiaomi followed closely with a 23 per cent share

By Prabhjeet Bhatla

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Adverse sentiment towards Chinese products has directly benefitted South Korean electronics giant Samsung which has emerged as the largest smartphone brand in the country for the first time in two years in the third quarter of 2020.

A new global and India study by Counterpoint Research claimed that Samsung has become the leading brand in the India smartphone market after two years as it is growing strong at 32 per cent year on year (y-o-y) in the September quarter 2020. It is also the fastest to recover, surpassing the pre-COVID levels in Q3 (third quarter) 2020.

According to the report, Samsung's strong performance is credited to its effective supply chain and touching various price points through new launches. The giant's aggressive push in online channels, with the highest-ever online contribution within its portfolio, also helped it regain its number one spot.

Research analysts at Counterpoint Research are of the view that Xiaomi has slipped to the number two position for the first time since Q3 2018 with 4 per cent y-o-y 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, product strategy and growing offline presence, analysts believe Xiaomi will come back strappingly in the coming quarter.

Furthermore, the report from Counterpoint's Market Monitor service shows, India's smartphone shipments grew 9 per cent y-o-y to reach over 53 million units in Q3 2020, 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 still prefer online platforms due to the fear of the ongoing pandemic.

"The Indian smartphone market is on a recovery path as the lockdown restrictions have been relaxed. The market has shown 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," commented Prachir Singh, Counterpoint Research's senior research analyst, in a statement.

"Almost all the brands recorded growth compared to the last year. In terms of price bands, the mid-tier (INR 10,000 – INR 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 funneled into smartphone purchases. Additionally, smartphones have become an integral part of consumers' lifestyles in this changing environment," Singh added.

The Indian mobile handset market grew by 8 per cent y-o-y 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 per cent y-o-y growth in Q3 2020 with Itel being the number one brand followed by Samsung and Lava.

"During the start of the quarter, we 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," stated Shilpi Jain, an analyst at Counterpoint Research.

"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. Even 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 focusing on affordability by announcing cashback, promotions, and offers on devices," Jain added while commenting on the competitive landscape and brand strategies.

"On the manufacturing front, 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."

A basic customs duty of 10 per cent was announced on display modules and touch panels, which will be effective from the 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.

Prabhjeet Bhatla

Former Staff

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